I can't really agree with either of these answers. No, we shouldn't get rid of the grading system all together because it's necessary to know, for example, whether a doctor has good enough marks to pass med school.
I don't think kids need to be graded, though. There were so many times in school when I thought, 'wow this related topic is really interesting, but no one is going to give me an A for learning it, so what's the point?' In that sense I think that the grading system actually prevents kids from getting credit for taking initiative to learn on their own, or even to find new interests that aren't provided for them.