I have only ever sat two music exams: my GCE O Level as an optional 6th form subject in 1978 (i.e. at 17/18) and, in my mid 40s I did the OU A214 music theory course (i.e. it's a level 2 course equivalent to 2nd year university). I passed both.
I am currently considering whether to take exams or not for the sax and 'cello.
For me the purpose of the grade exams is that it provides a structured approach to learning and development, they're not an end in themselves (which I know they are with some people). They are also not the complete picture - they focus on technique and aspects of performance, but they do not cover playing in groups and ensembles, and I am firmly of the opinion that to become a more "rounded" musician, you need that experience as well. Performing with others will improve timing, sight reading, blend, dynamics and all those things which add to the experience.
Some people find the inevitable prescriptive approach of the grade exam system either restrictive or off-putting.
Conclusion? People work differently and we have to find the mechanism that works for us, but for many people the grade system works well.
What I would like to see is more resources generally in the education system at all levels for music and more opportunities for people of all ages to have access to tuition and ensemble playing.
I had hoped when I retire to do a full-time music degree, but that seems to have been blown out of the window....