Sure, you get my point though.
I think all grading systems are stupid. 
Yes I get your point, and as a broad generalization I agree with rachmaninoff_forever..
That said, lately I've spent a bit of time working on the idea of a much more specific "teaching method" of my own. I've been going through large numbers of pieces and grading them based on my own thoughts, not based on my experiences as a student but based on my understanding of a range of skills that I wish to develop in a student.
So instead of having this idea of lets cover a bunch of works at grade x - instead I have a massive explosion chart of piano skills, with many branches, and many levels per branch.
So I mentally assess a piece as being a few different levels, as referred to by each individual element, which I can cross reference with where a student is in regard to each element..
Doing so has given me a different perspective on grades, - I still think they are fairly useless to the individual, because the system is a little limited. But I can much better assess why certain things appear in certain grades and how to better sequence works for a student to learn..
..where now I might split grade 2 into 40 pieces, in a specific order (perhaps groups of 5-10), and have concrete reasons why a piece is in grade three. While practically identical to one in grade 2 so far as many of its challenges it maybe placed in
my grade three because I choose not to expose a student to a work that has a key signature with 3 flats/sharps until they've done at least X number of pieces with 2 flats/sharps for example..
But for a student at that level, they may end up finding the level 3 piece easier than some of the level 2 ones. So the grading has to do with degree of prior exposure to different concepts and learning somewhat hidden aspects in a desirable order, rather than a flat out this is harder than that.