Oh I agree. But they want you to be able to do the job when you start Monday morning, not have to go through training with you. That is why apprentice positions are very good. We get a few each year from Bentley, but besides that I don't really hear of many. It is the system, but it is also probably more productive.
It helps to have a character about you and to be adaptive, but they still usually like grades and marks as well. That is why I like coursework, because it gives you a grade which shows how you have performed over a long period (usually 2 years). It is better than a one off exam, but coursework is very easy to update whereas exams aren't, so give you a true result for that day. Coursework is quick and easy to improve.
Who do you mean by "they"? It depends on the job but someone thinking they know it all is exactly what I didn't want. Ours was (is) a very specialised business & we wanted people with no pre-conceived ideas but the ability to learn the correct way of doing things. We didn't have the time to get them to unlearn bad habits before teaching them how to do it properly.
Unfortunately too many young people are given the impression that a piece of paper means they can immediately start earning the same wages as people with many years experience. I'm afraid it just doesn't work that way. Having to deal with inexperienced college graduates who thought they knew it all was one reason I & many of my contemporaries took early retirement.
The employers. A mix of grades, past experience and personality is probably the key thing to getting a job, but increasingly it seems the need is to get higher grades. That's probably one reason why they introduced the A* into A levels, so that it splits the A students from the A* ones, so now it's easier to see who got the better marks. That's just the system working.