On one side, it is probably good to motivate pupils to aim for something, and get good at it - but on the other side, you obviously end up with a bunch of kids that are just really good at grinding away - even if their heart is not there. And must become some obligatory thing, because everyone else is doing it.
FWIW, over here academics is the only thing that maters. There are no entrance exams, no personal letter, no letter of recommendation, no extracurricular activities. Your GPA is the only thing that maters.
(Of course, that also has its downsides. People end up re-taking HS exams year after year, because someone beat their GPA with a decimal point.)