[nicoburns]

The thing is that most university grading systems have a very high rate of false negatives. For example, in the UK it is rarely possible to retake a course. And this means that messing up a single exam can cause grade problems, even if the material is well understood.

In my experience, exams are often full of ambiguous questions, questions testing knowledge that is not part of the course syllabus, etc.

If the grading was fair, I would agree with you, but it rarely is. And IMO this is what students really hate: they put in a hell of a lot of work. They actually get to grips with the material, and for stupid reasons out of their control they end up with no credit for it.