I can tell you that almost every teacher who is not burnt out, does care about how we measure knowledge, mainly because they have to. The big difficulty is that there are two roles for teachers, on one hand you are a mentor and supposed to impart knowledge onto your students (the teaching part). On the other hand you are a gatekeeper, you are supposed to check that the thresholds for some qualification are met. Now if we had an ideal way to measure knowledge those two roles would not really be in conflict with ech other, but because we don't teachers have the difficult job of trying to teach a subject and at the same time find a good way to see if the students actually learnt what the were supposed to. All that with a limited amount of time that is available.
What do they do with the information? The threshold in most courses is to be able to pass the next course. The students who won't do that, tend to drop out, or switch to an easier major, of which there are many.
Teachers do tend to change their content and methods if a large number of students are failing exams, but I think it's based more on a hunch, than on hoping that test scores will yield analytical quality data. This is the sense I get from talking to a lot of teachers. My only teaching experience was one semester at a big ten university, a long time ago.
