Its a good concept in theory. But so is communism. How'd that one work out for Russia? Cuba? North Korea?
In practice, it places pressure on the schools to promote students who fail to the next grade level, which helps the school look good but fails the student in question. It also places far to much emphasis on standardized testing, which in turn forces teachers to "teach the test". I never understood that concept personally: it seems to me that if you just teach the subject matter and teach it well, standardized testing becomes almost a moot point: Students will pass because they've been given the knowledge necessary to do so. But evidentially, that’s not the way it works. Again, this fails the student.
Of course, my take of the matter might be skewed slightly given my incredibly low opinion of the nation's public school system in general. Chibi-Silvercry is only 15 months old, but I'm already looking at area private schools to send her to. They’re damn pricey, but I'll sell crack to pay the tuition before I doom her to my area's craptacular public school system.