This is simply not the case. How well the person knows the material is more than yes/no. You'd be rounding the exam result to 1 bit and throwing away the extra bits of information. Maybe it's a good thing not to show that information to the student, but I'd like to see an argument for why the advantages of hiding that information from the students outweigh the disadvantages.
As for competitiveness in education...there are advantages and disadvantages to it. I'm not convinced that class rankings are a good idea, but I'm also not convinced that the optimal target for competitiveness is zero, to the point of not showing students their grades beyond pass/fail. Anecdotally I've seen the aim for zero competitiveness have perverse effects, where students instead start to compete on how lazy they can (appear to) be while still getting a pass, to show how smart they are.
Harvard is one example in the US and McMaster is an example in Canada. Neither place has students competing to be most lazy.
I think it might be worth spreading some of the standards from medical schools to other programs. Don’t assign a grade to a student, make everything pass/fail. Either you know the material or you do not. There’s no honor roll or deans list and no class rankings.