The UK is quite silly as well!, exams are generally scored like this:
>90% = A*
>80% = A
>70% = B
>60% = C
>50% = D
>40% = E
>30% = F
<30% = U (ungraded)
So 30% is an F, but is still considered a 'pass' - however, only A-C grades actually count, school league tables are based on A-C grades, and any employer would only be interested in A-C grades.
I can only imagine it's because of this wierd idea you can't tell someone they have failed? - a kid getting an F knows damn well he's failed, even though they don't tell him
We take school kids on work experience, and you have to fill an evaluation form in afterwards, and it used to say "only make positive comments" - it does go in the childs permanent record. On one particularly bad student, my only (positive) comment was "He turned up
eventually, on some of the days!"