It's not a crazy objection; in other environments (for instance, inside corporations), peer and customer review regimes do foster CYA cultures. Also: the best teachers tend not to be the friendliest or easiest, and the issue is not just "will those teachers get bad performance reviews", but rather "will the act of measuring disrupt the behavior we're trying to measure?"
In many other situations that foster CYA cultures, the people doing the evaluating have as much to lose (might lose my job, lose a bonus, etc).
Student/teacher situations are somewhat unique in that students don't choose to be there, and will usually be gone in 1 year, and definitely in a few years. Students have far less to lose in this situation. That may make some of the be more harsh, but it likely (based on the article) will just make more of them honest.
I can't be honest with my boss because he might make life a living hell or fire me. I can certainly be honest with a teacher in a school who I'll never see again in my life.
Teachers can have a very big impact on someone's life. "Oh I see you want to go to this college, wouldn't it be an awful shame if that B turned into a C...."
