Thanks for giving me so much to think about and clarifying many of the issues I was struggling to articulate for myself Graham; great post.
I'm intrigued by the notion of Badges as a mechanism through which formative assessment can take place and look forward to reading the follow-up post. In my mind, badges are by their nature summative, indicating (or rewarding?) achievement of a particular standard. An end point or target to work towards. But I'm certainly ready and willing to be influenced by alternative views ;-)