I totally agree with you about dropping any one size fits all teaching/grading etc. When I first taught grade one, I used a method of teaching individualized reading, pioneered by Sylvia Ashton-Warner w/ Maori kids in New Zealand. I continue to teach the individual as well as the class. People constantly give me many reasons why they can't do that or don't even try or don't want to bother and they are all very good reasons. I'm lucky (or foolish) that for one reason or another, I'm able to give everyone personal feedback and have everyone rewrite everything until the errors are mostly gone. This means I mark everything twice or three times. Sadly, it's not doable with 200 students. TOPIC TOO BIG, HEAD HURTS THINKING ABOUT IT. Thanks for your story.
I agree -- with large class sizes, you can't individualize of your own volition. In those situations, you have to trust that subgroups will form among the whole class, and that the subgroups and individuals who need extra help will seek you out, rather than you being able to watch over each of them.