Schools in the US prefer to have everyone barely pass exams, to 80% passing with high scores and 20% failing irretrievably. The failing students' parents have too much political power over the schools.
I can't believe I didn't think of that before. The unwillingness to risk (localized or individual) failure is the strongest guarantee of mediocrity.
It also explains the state of gifted & talented education, incidentally.
Post by fellow LW reader Razib Khan, who many here probably know from the gnxp site or perhaps from his debate with Eliezer.