Exams are supposed to tests students. But it has been proved in most cases the they are useless. As you said, memorization weighs more over learning, and reasoning. So, how can we tell if the any students are not just repeating the words of a text book without analytical thinking.

Moreover, through tests students are given a grade, a number, and it is difficult to measure capacity in a test and assign numbers to it without considering the external factors like fear and anxiety students go through.