I agree with your complaints, though I disagree with it being based in "trophy" culture. (Though I do agree that Baby Boomers' obsession with giving everyone trophies is pretty harmful.) Rather, I think it's more vaused by incentivization- offering a positive incentive in institutional settings like this almost inevitably leads to gaming the system. This relates to our societal obsession with having numerical metrics for everything, even when it makes little sense to do so- as with test scores today as being somehow viewed as a measure of learning.