Seems like a very mean dynamic that instead of making the tests simpler/easier, they’d rather keep the gap deep and just pass people with low scores.
That can’t be a good mentality for students, especially since it seems they have that “scoreboard” at the end of big tests.
That’s an easy way to develop a lot ego issues.
To understand the context, you have to realize that Japanese schools have a very robust and individually-focused career counseling system. The system as it was originally designed was meant to identify which students could succeed academically and root out those who couldn't. In Japan the income gap between educated and trained workers is not as big as it is in the US and even other places in Asia, so directing students to get jobs out of highschool or enter vocational training is still considered socially "fair". The idea is not to push everyone into higher education where the country might then end up with large numbers of unemployable barely-qualified graduates.
Also, the ego issues are worse not for the kids at the bottom but at the top. Japan has their infamous soto-uchi culture where the nail that sticks out gets hammered down. The kids averaging 30 aren't those nails. That's also why Japanese career counseling is geared to protect the high-achievers and get the average kids off their backs.
There's actually a manga called Yumenashi-sensei that deals with this issue. Recommended if you want a slightly deeper understanding of the situation.