Basically, standardized testing is a clumsy, ham-handed reaction to the very real problem that there are a lot of lousy teachers that are hard to get rid of. The damage that bad teachers do is so severe that any system that gets rid of them will probably have large net benefits, even if there is a lot of collateral damage along the way. It would be nice if we could get rid of the loser teachers without causing this damage, but nobody has a credible way to do this.
What I'd like to know is how the elite private schools manage their teachers. My guess is that they hire the best people they can and let them do whatever they want, just like good universities do.