The (Western) educational system still does this for PhDs. Grades barely matter, and in most places you have two oral exams in your entire 5 years: your qualifying exam, and your final defense.

The reason it doesn't happen for the rest of the system is scaling. The US awards about 60k PhDs per year, compared to about 2M bachelors. There simply are not enough faculty and it is not realistic to hire enough (if there are even enough qualified people in existence)

And that's ignoring all of the problems with "not giving out grades" or "ending credentialism" - I guess people are supposed to just get hired on vibes?

Since everyone has a meaningless degree already the degree absolutely does not get you hired for over a decade already. Interview outcome, which sure you could call vibes