The HSC is supposed to be a measure of your abilities against particular statewide standards (i.e. the band system) as well as an indicator that you have completed your schooling up to Year 12. So, a mark of X indicates that you have demonstrated certain indicative skills and knowledge up to a numerical equivalent of X. So, when someone looks at your record of achievement, he or she can see what level of skills you are able to demonstrate in a particular course. The higher the mark, the more skills and knowledge you can demonstrate. Obviously, it is an imperfect system for that intention, but it's as good as it can get within the given limitations.
It is not intended to directly measure intelligence (that's what an IQ test is for) nor is it intended to directly measure hard work, however the general empirical trend suggests that it does this implictly but of course there are outliers to this general trend.