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The rise of Step 1's importance has occurred in conjunction with two other phenomena: (1) the spread of P/F unranked grading systems, and (2) the marked increase in the average number of residency applications. The former has become common because there is a strong desire among institutions to minimize competition between classmates and promote a collaborative learning environment. So in essence we traded students fighting each other with students fighting a common enemy (the USMLE). The latter is multifactorial in origin, but the push by student affairs deans to draw everyone toward the sublime middle hasn't helped.
Standardized preclinical exams would be awful. They would subvert one of the core principles of academia: the faculty is in charge of the curriculum. If every test were a mini-USMLE then I imagine most schools would move toward a "teach-to-the-test" model, which would optimize scores but forgo anything resembling an authentic education. No thanks, we have enough problems with just one monolith.
What are your thoughts on standardizing clinical year grades and making them more objective? Iirc some schools have clinical grades fully determined by shelf exams, but if there's a way to standardize clinical evaluations and make them more objective, that would be better.