As with any self-sustaining system (politics, economy, ecology) you need a feedback loop to form among the parties with conflicting interests. If the feedback loop is broken, the system deteriorates and ultimately falls apart. If it's inefficient, the system tends to be inefficient as well. (Examples: soviet-style planned economy, rabbits in Australia etc.)

This kind of thing (teachers grade students, students grade teachers) could improve the efficiency of the feedback loop and thus efficiency of the education system as a whole.