Traditional Testing vs. Narration

I saw this article in Homeschool World, and I encourage all parents (homeschoolers and public schoolers alike) to read it.  It was first published back in 1993 in Practical Homeschooling.  To sum up the article, having a child TELL you or SHOW you what he knows is a much better indicator of his knowledge than traditional test methods as used by public schools (true/false and multiple choice questions).  Perhaps this is why so many older children dread "essay" questions. If they don't know the answer, then faking it in an essay answer isn't going to win them any brownie points.

The article goes on to say that children who really dig into subject matter on their own tend to own it or know it more.  It becomes THEIR story, THEIR knowledge.  It's not just information thrown at them like spaghetti that we hope will stick. This is a major part of the Charlotte Mason method of teaching.  If you haven't already, you should check it out.  

All of this got me thinking about "narratives" in general and how we as a culture have lost site of telling stories.  This in turn got me into research mode.  This quote is taken directly from wikipedia:

"The Narrative Paradigm is a theory proposed by Walter Fisher that all meaningful communication is a form of storytelling or giving a report of events (seenarrative), and that human beings experience and comprehend life as a series of ongoing narratives, each with its own conflicts, characters, beginning, middle, and end. Fisher believes that all forms of communication that appeal to our reason are best viewed as stories shaped by history, culture, and character, and all forms of human communication are to be seen fundamentally as stories."

Our daughter LOVES to tell stories.  We've been encouraging that as much as we can.  She shoots videos with her iPod and takes great pleasure in sharing them with anyone who cares to view them.  She recently re-discovered Sector 7 by David Weisner and has a great time telling that story in her own way.  If you're not familiar with the book, check it out from the library.  It's a great trigger for creative thinking.    

So all of this brings me to this question: do you think there is any merit in traditional test methods after having read the article I linked to in the first sentence?