The only problem I have with the whole “Don’t be afraid to fail” thing, is that so much rides on the grades a student receives it makes it very difficult to not treat every assignment as a highly critical task which must be as close to perfect as possible.

I get what you're saying in general, but I don't think most profs actually want their students to fail when they're actively trying. I assume that the assignment where he asked them to "read and reflect" on an essay that it was probably something ungraded. I know there are some courses (especially large lecture ones where there could be hundreds of students in one class) where you don't have a lot of signposts other than tests telling you how you're doing in a class, but there really should be something outside graded assignments for you to get feedback on.