Custardo, your story made me so angry for you! That's crap.
I can believe some children not knowing their names. I do think there are some examples on this thread that are a bit precious - a child who answers to 'princess' may give you middle-class hives, but she and her parents are presumably quite happy with it as a pet name.
My DH, when he first went to school, might not have 'known his name'. In his culture, you almost never call someone - especially a child - by their full first name. You always use nicknames, and each name will have as many as ten or twenty nicknames to go with it (before you get into family made-up nicknames). I think that's quite important: not all cultures would want a child to learn their full first name that early on; it'd be seen as odd and cold parenting.