Is it acceptable for professors to base part of students grades on attendant & class participation,?
It is very acceptable and in fact is standard for most classes. What happens in the classroom isn’t supposed to be a mere inconvenience; it is part of the learning process. A student who is not part of the discussion, or who never hears the whole lecture and relies completely on notes, does not learn anywhere near as well, even if they can get by on papers and exams. Because it is harder to be completely objective about participation, though (I can count how often you speak, but I can’t objectively grade the quality of each comment without disrupting the class), the percentage of the grade which is based on participation should be kept within reasonable limits. I usually keep it at 10-15%, but I’ve had to stop instructors from basing half the course grade on participation!