I am not sure where you went to school, but in the New York City public school system, report card grades followed a formula of roughly the following:

  65% exam scores / written essays
  25% homework
  10% classwork

A 65 was basically a D-, and anything less was an F. In other words, a student who receives perfect scores on all exams or written essays (depending on the subject) could receive a D-, as though they had only the most minimal understanding of the subject matter.

So while the report card is meaningless, it is meaningless for a different reason than you suggest. It is meaningless because it has nothing to do with aptitude or education and everything to do with obedience.