I mean, that depends on the function of the test, right? If the function of the test is to establish a minimum knowledge that all US physicians should know, then that would be the correct solution. But the problem is, the function of the test is so much more than that nowadays, due to residencies relying on it heavily for quality. So for example, imagine that you can divide a class into top, middle, and bottom tertiles. And let's say you have a test right now that reliably distinguishes them, using whatever questions/methods. Then the people making the test want to make it P/F only. If you're in the bottom tertile, what do you say? You say, "Hell yeah!" because a "pass" makes you look better relative to where you would have scored otherwise. The middle third is probably mostly indifferent, depending on if you're upper middle or lower middle. What does the top tertile say? They say "Hell no!" Because a true P/F exam where the test is assessing only baseline knowledge doesn't help you. In fact, it hurts you by removing one more thing that could have been used to distinguish yourself from the rest of the pack.
So I certainly think that Step 1 is the best tool we currently have to distinguish top students from mediocre students. But I also think that Step 1 could be re-vamped to achieve this goal using better written questions. Presumably, if you relied more heavily on clinical reasoning and less on factoid recall, you'd still get that nice bell curve and you could still reliably distinguish top from mediocre students reliably (although the top students now may be slightly different from before). At the same time, you're emphasizing what you're really look for, which is clinical reasoning ability.
I remember that exact question. I think it's realistic if you know your biochem. It's definitely not something that you would need Anki for. I think it's a good thing to understand the steps of the central metabolic pathways of life in detail (i.e. glycolysis, gluconeogenesis, TCA cycle, oxidative phosphorylation +/- urea cycle and fatty acid metabolism in less detail.