Why not, indeed? I do think that a portfolio approach is much, much more effective in evaluating people's capacities to do stuff.
It's also costly. That's why we keep grade-based systems: those numbers are cheap to compose, cheap to evaluate, and provide just enough pseudo-objectivity to make bureaucrats feel all right about basing decisions on them without having to do any deeper thinking.
>When graduates are hired, why don't you look at their actual skills and knowledge?
Well they should!
>Teacher's job should be to teach and give feedback, so that students can correct themselves. It is employer's job to assess them.
Slight disagreement, here. You should not be allowed to gum up the works in Calculus 2 if you can't pass Calculus 1 to some set standard. Just saying.