The common sentiment, especially among teachers, on this subject is that if we lived in a world where learning was done for the sake of learning, students were self motivated, and lessons learned were immediately applied, a formal method of assessment would be unnecessary.
As it is, public schools today are less a means of educational facilities, and more like people storage facilities. Even as a teacher, though it pains me to admit this, I believe it is true. This is why Montessori schools can and do exist. There is no formal assessment in Montessori schools and students move at their own pace, motivated by their own educational goals.
Some private schools are surprisingly similar. Yet, again, the problem is when the crossroads comes from transitioning outof this environment and into the traditional education environment. How does a person prove he's ready for university, when the university acceptance board only speaks one formalized assessment language?