I'm not sure that character is an element in the examination system; other than that every student should do his best and only turn in work that is his own. Those who are less than honest should not be sitting for exams in the first place.
As far as rewarding memory, it depends greatly on the way the exam is structured and worded. Many exams are written at a level such that the student must understand the material to respond correctly to the answer. Exams which simply call for recall based on rote memorization indeed reward those with good memories who may not understand the material at all. I often quote a poem to my students in French which I do not understand at all--but I memorized it 40 years ago. There is a significant difference between memorizing and understanding.
Another issue that is more of a concern is test anxiety. Some students freeze at the thought of an exam, largely because teachers tend to threaten them with "outer darkness" if they don't do well. Others who are free thinkers do not do well on multiple choice questions as they don't think iin terms of absolutes. So there are problems with the examination system, but if the exam is properly drawn, memory should only be a minor factor.
I don't think so...because when taking examinations you just memorize things and forget all about it afterwards. I think we should have to apply it in our daily lives.