I think the problem with it is its lack of flexibility - fulfilling set criteria rather than meeting the needs of individuals. Some children can cope with all their obvious mistakes being corrected in every piece of work that they do and others are so lacking in confidence that getting them to put pen to paper in the first place is quite an achievement! Surely a good teacher should be able to discriminate between the two and alter their approach accordingly? After all, in State schools, teachers have to teach children from a whole range of backgrounds with a whole range of abilities and disabilities; at Eton, they screen out a huge proportion of children before they've even started, so it is easier and more appropriate for them to adpot a more uniform style of teaching.
I do, however, think it is a dreadful mistake not to have sessions during the school week where the whole purpose of the session is to practise grammar, spelling and punctuation and to correct any errors in understanding, particularly if errors in other contexts are virtually never corrected!
One thing I would question is that your teachers always corrected all of your mistakes. There are mistakes and there are mistakes... I am aware that I still make occasional errors in grammar or punctuation, or even spelling, but none so glaring that the whole meaning of my sentence is lost. I'm sure I still did that at Oxford and I don't remember my tutors littering my essays with comments and corrections. And then, of course, there are preferred spellings versus acceptable spellings; definite grammatical rules that must never be broken and preferred ways of doing things. What grates for one person may be acceptable to another. Some corrections may be more personal taste than others. Some I would most definitely always highlight as WRONG, WRONG, WRONG, whatever the subject or the context, because they are particularly irritating and unmistakeable mistakes (its and it's; apple's versus apples, for example...).