I think I don't see it that way. I don't think that exams ought to be all that central, because ultimately, it's competence in the language that matters, and not some grade on a piece of paper. Students are bound to focus on grades, sure, but I think it's the function of the teacher to counteract this tendency, and to instill a sense of self-motivation when it comes to language-learning that goes beyond exam-dates and grades. That's what accounts for long-term progress.....the teacher's main function is to get his or her students through the exam with the best possible results
But I suspect you were speaking tongue in cheek here, anyway.
Wouldn't higher expectations have a stronger motivational effect? After all, we're talking about predictions here, and expectations might easily be surpassed, as they try to match your flattering impression. At least that's my experience. But then, my students are exceptionally bright and motivated anyway........and being pragmatic about what the students can realistically accomplish in the time available.