Hear! Hear! Well said.

Just a comment on this:

Employers who ask to see your grades will likely notice if you did not pass a course and maybe you would prefer they see a higher grade.

A plum employer would be more interested in why you didn't succeed, what lessons you learned from the experience, and what you would do differently given the chance. You shouldn't be afraid of failing, but afraid of not learning anything in the process, and afraid of not trying again.

Good judgement comes from experience. Experience comes from bad judgement.