I see two different issues - NCLB and school district standards.
Whether the school cuts an F off at 50% or 2% shouldn't affect the NCLB standings. I believe those are based solely on student performance and participation rates of the annual standardized testing. My kids attend the best high school in one of the nation's largest school districts, and this school is actually on academic probation under the stringent guidelines of NCLB - despite the fact that over 90% of graduating students go on to college and over 85% of entering freshmen graduate within 4 years. Why are they on academic probation? Because a small subset of special education students failed to meet the ever-changing bar set by NCLB. (The percentage of students performing at a certain level on standardized tests is also raised every year under NCLB, meaning standards set five years ago have moved.)
As far as whether the school district should set such a policy, I can see both sides. My youngest currently attends a school that does not provide letter grades at all. Instead they are ranked as "emerging", "nearing proficient", "proficient" and "advanced". It is useless to me as a parent, the kids don't like it, and the teachers hate it as well. And the principal who signed the school up to be part of the pilot program is long gone. Kids understand reality a lot better than we give them credit for, and they know when they're being placated. I think there is a big difference between creating achievable goals and pretending goals are bigger and better than they really are.
On the other hand, my high school student dug a hole for himself last year in an advanced placement class by losing a folder of assignments. The teacher gave him all zero's so that his semester grade was a 12%. He earned all 100%'s for the rest of the year and still ended up with a D for his final grade. It was ridiculously punitive and the lesson my son learned is that he would have been better to have dropped out of the class and retaken it in summer school than to have worked so hard to pull up his grade - not a lesson I wanted him to learn.
So putting a cap on what teachers can do when it comes to punitive grading - I do see some benefits.
