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That's a rather thorny question which can't easily be answered with a couple of paragraphs, but here's my take on it anyway.
Tests can frequently be "skewed" in order to give the administrator(s) of the exam(s) the result(s) they want, which makes the supposed "test" effectively meaningless.
Some people are not "good" test-takers. Intelligence/ability has nothing to do with it. It's more an issue of "oh my god, I'm being tested on the stuff I just learned, but now I'm so nervous I can't remember any of it". The Fraternal Unit, for example, doesn't lack for brains (his constant defense of the Maternal Unit notwithstanding), but you'd never know it from his standardized test scores. Conversely, simply scoring 100 on a test doesn't necessarily mean you've "learned" anything other than memorization skills. To really *learn* something requires comprehension of the subject matter.
Here in the US, the public education system has become so heavily bureaucratized and "dumbed down" that I take a rather dim view of the "exemplary" rating given to a lot of school districts. This rating is based on standardized test scores. Twenty years ago, the test they gave prospective HS grads in TX was called the TEAMS test, for TX Educational Assessment and Mastery. I recall thinking it unlikely that a fourth-grader could fail that test, much less a 17 or 18 year old student. Yet, several years after I graduated HS, they "dumbed down" the TEAMS because it was "too difficult". Then came the TAAS, which was ultimately replaced by the TAKS. Each reinvention of the standardized test came about because previous iterations were considered "too difficult".
Therefore, it's unlikely the public school system will ever produce meaningful results, if the bureaucrats in charge keep turning a blind eye to the school administrators who hand-feed students the answers to the tests, so that the school can keep its Exemplary rating, and the money that goes with it, for another year. Students won't get the education they need and deserve if a district's funding is tied so closely to test results that teachers are basically forced to "teach to the test". Bright students shouldn't be forced to sit through a "dumbed down" curriculum. Students who need extra help shouldn't be forced to try to keep up with work that's beyond them. Helping less-capable students cheat doesn't "help" them at all. If a student is ready for advanced literature, forcing them to sit through "See Spot Run" doesn't help them either.
That's why, in this day and age, I'm largely in favor of homeschooling. With the internet and social media now so commonplace in so many homes, even if a parent doesn't have the complete skill set to, say, teach their child chemistry, that can be easily solved by field trips to local museums, obtaining the right materials from a teacher supply store, going online and finding a local homeschooling group where one parent's deficiency is another parent's degree/career, etc. Homeschooling, when done right, isn't solely the purview of the religious wackjobs anymore.
To make a long story short (yeah, I know, so sue me already), while I think it's important to have some way for the public school system to measure the academic progress of their students, "standardized" tests are, and will remain, meaningless as we understand them now. Educators have to be willing to do things right, even if it means they might lose funding because some students might fail. Real progress can't be measured by spoon-feeding students the answers, or by making "tests" so easy that the "bell curve" becomes meaningless.