this 'mastery' system sounds great for things that can be separated into levels. STEM subjects tend to be doable (and so is skill based crafts like woodwork). But what about things like english literature? how to interpret Jane Eyre? how to compare and contrast west side story and romeo and juliet?

Reading levels have been a feature of literature study for centuries. Literary works have been "graded" (assigned levels) and sequenced for a very long time. Also, even a single, significant work, such as a work by Shakespeare, would be broken into levels, with the basic plot learned first, then later some memorization of important passages, then more analysis of the language, then a study of the historical events that formed the background of the story as well as the history that was taking place as Shakespeare was writing, then, with all of that in place, a consideration of the themes and subtle messages of the work and comparisons to other works.

Since the mastery approach paid such close attention to readiness, prerequisites were better thought out. The prerequisites for literature at a certain level were not merely lower levels of literature. They also included the study of history, languages (Latin first, then Greek), rhetoric, and so on.

There's no single, objectively correct sequence, even for STEM subjects. But a master teacher can learn from experience what should be learned first, and to what level, to make a student fully ready to learn any given thing. Then take many experienced masters, put them together, and have them carefully work out a prerequisite tree from which they derive a sequence of instruction.

The difficulty is that 'content' in Literature/Language study is less valuable than various language related 'skills'. Do I necessarily care that my students have read Jane Eyre? Not at all. Nor, would it acceptable to expect that as a piece of 'required' knowledge for advancement. Instead, I care that they can interpret, analyze, and create based upon/in reaction to that (or any other) piece of literature. Even those discrete skills cannot/should not be defined linearly because they are (and should be) repeated, refined, and made more sophisticated over the years rather than being prerequisites for other kinds of knowledge (i.e. to provide evidence for your thinking is a very different task at 12-years-old than it is at 17-years old, but they are still fundamentally the same task).

Another concern is that while a mastery-based education system could be wonderful for middle/high-performing students - it is likely to lead to a huge mass of underperforming students in the lower and middle grades. "Oh, you haven't mastered exponents; Then, you cannot move on to...". The reasons that these students fall behind may have nothing/little to do with their classroom experiences and yet they would not be allowed to advance. Considering the costs - there is no way we're prepared socially/fiscally for a huge backlog of low-performing students in these grades (particularly when they begin to drop-out en-mass once they get tired of failing at "little kid work").

At the extreme, if you refuse to move a student forward to higher-level content are you impeding their right to an equitable education as their peers? There is civil rights precedents for this question with regard to special education students being refused higher level academic work because they could not (by some metric) prove themselves "competent" to move forward.

Further, is the content we require our students to learn truly necessary knowledge for adulthood? It had better be if you're going to refuse moving an 18-year-old to the eighth-grade because they cannot write a "properly" formatted paragraph.

I agree completely that this is problem, but unless we decide that fully educating every child is the actual, explicit goal of compulsory education - and accept the significant costs that will be associated with that goal - then there will always be a purge valve for underperforming students. Currently, that is moving them along despite low performance and obvious gaps in knowledge/skills.