What should be tested and to what standard in language testing?
Are your speaking of the language portions of standardized testing, like the state standardized tests, SAT, or GED?
Language is multi-faceted and very subjective; therefore, it is very difficult to access. The SAT used to assess language only by multiple choice. One section of the test used word analogies: vocabulary by relationships. Recently, they have replaced this nonsensical method in favor of an essay portion.
However, problems have arisen as to the accuracy of the essay scoring. The SAT graders are not highly screened, unlike the AP graders, who all have masters degrees and years of tenure as writing teachers. Some colleges, I have heard, look at the SAT writing scores with a grain of salt. In other words, they don't place too much stock in them, relying more on the Reading and Math portions when screening applicants.
I believe the best language tests are open-ended, not closed. Open-ended essays give students more opportunity to reflect critical thinking skills, divergent thinking, creativity, and risk-taking. Closed, convergent testing of language is problematic, as it relies on a "single answer approach" to language, which is limited and possibly biased. Those who do well are those like the test makers (white, upper class).
Enotes' summary of Vygotsky's Thought and Language has this to say:
Vygotsky’s analysis of the differences between written and spoken language also has relevance for teaching. Writing is a tool whose importance in the developing ability to use symbols is not at first apparent to the child. Writing is speech at its most formal: It uses more words, addresses an absent audience, and makes the greatest syntactical differentiation.
Vygotsky’s developmental theory also has implications for testing. He finds that the measurement of mental age, or of concepts already mastered, or indeed the use of standardized tests in general is not so accurate as the measurement of the results a child can achieve in solving a problem with some slight help. The discrepancy between a child’s actual age and the level he can achieve in solving problems with assistance is the zone of proximal development, a truer measure of intellectual progress.