I see it two ways:
1. 'You should have failed' is pretty harsh; a more tactful way
would be to just write 'See Me'. Any (constructive) criticisms
should be done in person.
2. The student should see it as a challenge to work harder and
to prove the teacher wrong.
This reminds me of an incident back when I was in Sec 4. My
Maths teacher (who taught us both E and A Maths) showed on the OHP
what grades the MOE expected everyone to get based on our PSLE
scores.
Since I had gotten C for PSLE Maths, the MOE projected that I
would get B3 for E Maths, and B4 for A Maths.
My teacher challenged me: 'Fudge, the MOE is insulting you!
What are you going to do about it? Go prove them
wrong!'
So I went all out to prove them wrong. I got A1 for E Maths, and
A2 for A Maths.
Take that, MOE.
your teacher is great in using this as a springboard and
motivation to spur you on. but then not all teachers use this
method. even if all teachers were to use this to spur their
students, not all students will make that leap and work hard and
prove MOE wrong. some students might take this as a challenge and
work hard, some simply not interested and heck care.