You have to have that (yeah, Realschule plus FH works, too, but that’s not exactly the same and also a whole thing). To say nothing of the absolute bonkers aggressive tracking that’s happening early on. It’s not a single test and might not seem as dramatic because of that, but if you actually think about it, it’s horrific.
I think this seeming less dramatic (because it’s not a single test but rather something that happens to kids just entering puberty, long before they will ever think about going to university) makes it seem all nice and fair, but actually it’s horrible.
They tell me there are options to move on from Hauptschule to Realschule, etc. if that's really what you want and have the drive. The problem is the environment. Everyone around you isn't going to college, they're all going to work in some factory or as a salesclerk, and you're a nerd if you try to advance.
One other factor here is I think that it's usually the parents who decide your future early on. Yes, there's recommendations by your school, but AFAIK this is not definite and can be overridden within reason.
However, if the parents never get the Abitur or have many friends who did, they'll be intimidated, even if your grades are perfect and you got the recommendation to go on the university track. So often they put you in the same school track they took since they know what to expect.
It hinders social mobility. On the other hand not everyone wants to go to college, not everyone wants to study and rather get their hands dirty in a job that doesn't require a degree. Forcing those who don't to stay in school (if there's a single track) till the end with a lot of struggling towards the end (and then the stigma of not completing would be bad as well) maybe graduating with bad grades... that doesn't sound ideal either.
@sibling comment: While that's a negligible thing, most conflict when chosing the advanced school track over here arises from parents that prefer to send their kids to higher than recommended school tracks rather than lower ones. Plus, these days, the lower two tiers of advanced schools often take place within the same institution and allows students to relatively flexible switch to one appropriate for them.
The horribleness of the German system can be completely explained with the power of defaults / inertia. Sure, there is some way to go from here to there, but on a societal level this is just destructive and corrosive. The system is not set up in a way to smash barriers or allow fair entry.
If you didn’t go to Gymnasium (university prep school) you can get an Abitur in one year after graduating Realschule or you can get a Bachelor’s from a Fachhochschule and then a Master’s from a university.
Germany streams more aggressively than the US but the idea that there are no second chances is a joke.