It's not fair to some people to grade PE based on performance.
It's really a grey area for a lot of stuff, though.
There was one girl I remember in my PE who was just fat, and didn't care
She talked quite a bit about eating at McDonalds on an almost daily basis
She got offended about her weight very easily
But they couldn't really do anything about it. She would refuse to participate in a lot of activities because of how poor her shape was, and so the teachers had to decide what they were going to do.
That's the kind of case that's bothersome to everybody, and doesn't fit into the system well. In a public school, it's just impossible to deal with people like that.
She had a lot of other stuff going on too, though. The environment that she grew up in must have been absolutely awful, and I do feel bad for her, but at the same time, you have to take responsibility at some point.