I don't necessarily agree with the metric either, but the system is what it is. ROTC needed a way to establish a national OML and it was the easiest way to go about it. It's difficult to compare people who attend different schools with different cadre with different access to training.
And for the most part, the system seems to work. While I can't say anything for their future abilities to lead a PL yet, I can speak to the character, values, and dedication of my classmates, and the OML generally put them where they belonged. I'm slightly biased, I think you get screwed if you have a difficult major, but I'm an engineer so...
You're told what you need to do to be considered successful by ROTC. Whether or not you agree with the system, if you want to get to be a soldier in the branch you desire, you follow the rules and drive on. Maybe theres something to be said for that.
From the 4 years I've spent in college, the personal development I've derived from the less important things (as far as the ranking system goes) like competing in Ranger Challenge, starting from a failing score and moving up to maxing the PT test, being the Cadet BC, preparing for the Bataan Memorial Death March this semester, professional reading on SF and IN - all that has been far more useful to me because I've had to focus on keeping my grades up as well. If I had been allowed to get away with my grades being lower, I wouldn't have had to deal with the time management aspect nearly as much.
It's all about being able to balance all the aspects of ROTC so you fulfill the whole "scholar-athlete-leader" profile.. and have some fun while your in college.
-Derek