NCLB requires States to develop their own standards and their own tests. States even get to set their own cut-off scores for what is considered proficient and what is basic. The only "Federal intervention" in NCLB is in requiring the States to measure student achievement--however they want! The law also requires that States disaggregate data by race, gender, and socioeconomic status. This is because many schools and districts have hidden the low achievement of certain students (poor, minority, boys) with the high achievement of others (affluent, non-minority, girls). It only makes sense that in order to serve all students, schools, districts, and states need to know how well instruction is working--for each group of students.
Because education is a local function in the US, each state, district, school, teacher has to figure out how to do that. That's the way the system works here and unless we change it, NCLB (or something like it) is the only tool the Federal government has (which kind of begs the question, "Why not a national curriculum?" but that's a topic for another post). The 95% testing participation rate that the law requires, and that has so annoyed schools, was put in place because in the past schools/districts would "suggest" that students who they assumed would not do well on the tests stay home for the day. For each provision a sordid reason....
While the home situation of students does impact learning somewhat, it does so much less that people think (see It's Being Done: Academic Success in Unexpected Schools). This takes away our rationalizations. There is no excuse not tracking what students are learning or improving that learning when the data shows it's needed. While no law is perfect, and NCLB can certainly be improved, it must not die if the US wants to serve its next generation. Remember--they will be in charge when we are old and gray.
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