The discussion around Regents keeps on coming up. Here is a brief answer and some links also here is a link to the NYSED response:

The basic argument is that theassignment of grades is subjective with no universal (standardized) method ofhow grade assignments occur at the local level. Here is a passage from a 2005Report to the Board of Regents (with a link to the document) as well as onefrom 2004

"Combine course grades andRegents exams?" This is often what people mean by "multiple measures."Averaging Regents exams and course grades is unsound because the work thatdraws an A in one school merits only a C in another. Grade inflation is awidely recognized problem. The Regents have a two- part requirement forgraduation. Students must earn 22 credits that are awarded locally, and pass 5Regents exams that meet a high statewide standard. There has always been a linebetween these two parts of the assessment system. To combine them crosses theline. Teachers know that averaging course grades and Regents exams would putenormous pressure on every teacher to raise grades. And how would averagingwork? Would course grades count for 20 percent? Or 40 percent?  And howwould we decide? Where is the expert opinion based on evidence that wouldenable the Regents to make such a decision?  Regents exams adhere torigorous professional standards for test validity and reliability. Where is thecomparable evidence for the exams devised locally?  The course gradesaveraging idea is unworkable.http://www.oms.nysed.gov/comm/2005/0205Commrep.htm

 "…standards vary. The Education Trust hasreported that work that draws an A in many low performing schools merits only aC in high performing schools. Regents exams, in contrast, represent a commonmeasurement of achievement. While classroom exams and other course requirementsare known to few beyond the classroom in most cases, the Regents exams aresubject to universal public and professional scrutiny."http://www.oms.nysed.gov/comm/2004/reg1204.htm