gradepass is still useful even withut activity completion.
a) it lets us color the reports with useful pass/fail feedback
b) it is a place to store that info even for teachers just to see it
1) Keep the gradepass there, and make sure the CSS is being set for pass/fail grades in the reports
grade >= pass ----> class gradepass
grade < pass ----> class gradefail
2) I do see the problem with the GUI ... best to leave it as it is in 1.9 (where it's correct at least, even if difficult) and work on something fancy later.