Actually, your school’s policy is only partially ridiculous. Having a transparent grade threshold to take the next honors course means that there is less opportunity for favoritism and corruption or the appearance thereof in selecting who gets into the next honors course. So that is a good thing about the policy of your school.
However, what is partially ridiculous is that there is no way to move up, like how some schools allow students who earn A grades in regular courses to move up to honors the next year.
If you get a lot of 80ish grades (low B or high C?), then grades alone will knock you out of the running at the most selective colleges, unless your parents donate a building or some such. In addition, if your school’s policy on keeping you out of honors courses even if you earn A grades means that you cannot get the “most demanding” mark on your counselor’s recommendation when you apply to those colleges, then those colleges are probably unrealistic reaches.