If you want teachers to be judged on subjective qualities like their ability to inspire students, you have to let schools hire, fire, promote, and demote their teachers accordingly. That means paying not by objective criteria like degrees and seniority but by a boss's professional evaluation. It means allowing into the classroom great teachers who have subject knowledge but not a lot of idiotic education courses on their transcripts.
Of course, teachers as a group don't want to give their bosses the power to evaluate them. Certainly, the teachers' unions don't want that. So to create any connection between classroom performance and professional evaluations, we're stuck with objective criteria, notably test scores. The alternative, beloved by teachers' advocates, is to have objective measures of teacher 'quality,' including seniority and academic credentials, and no measures of teaching quality. Standardized tests and prescribed curricula are far from perfect, but they're better than no accountability at all.
What would the AAUP say? And do we care? Postrel has in mind primary and secondary schools, but what she has to say applies at the college level as well. And at this level there is plenty of consumer choice -- so choice is not the issue.
The at will standard of employment applied to education. I've advocated it earlier.
(Postrel came via Newmark's Door)