Yes, and No.
If it makes people think-before, during and after the event, it is a good thing, in my view. If it doesn't, not serving its purpose. just like education.
Maybe with smaller classes, one can explore different types of exams. Oral, for instance. With large classes which are a norm even in institutions that can afford to have smaller ones, your options are limited. But creativity can probably be used here as well, to make it a more meaningful experience.
I have of course, found brilliant students through exams. But I have also found them by other means. So exams might not be the only way to grade the student. Application, which takes time to show up sometimes, could be another.
Entrance exams are another kind. They largely want to filter out a large populace, and so concentrate on that purpose, rather than being a genuine test of a person's all-round capability for engineering, medicine, or whatever the entrance exam is for.
I have had interesting experiences with exams of all kinds- open book, closed, viva, projects, presentations.. will try and list them out one day.