At my institution during the first decade of the century the A grade has increased from 29 per cent of grades awarded to 34 per cent - the A grade is the most frequently awarded grade, followed by W (the student quits), B, then C. See data here. This is a common issue both the W issue and the grade inflation issue have been recent topics over at the Teaching Economics listserv and seems to be common across the field.
My musing this morning (while I avoid final grading) leads me to the connection between central planning at state supported institutions and faculty working for the government and the organizational arrangements that evolve from the interaction between these public groups.
Adam Smith could well have be writing about my institution when he observed:
If the authority to which he is subject resides in the body corporate, the college, or university, of which he himself is a member, and which the greater part of the other members are, like himself, persons who either are or ought to be teachers, they are likely to make a common cause, to be all very indulgent to one another, and every man to consent that his neighbour may neglect his duty, provided he himself is allowed to neglect his own. In the university of Oxford, the greater part of the public professors have, for these many years, given up altogether even the pretence of teaching. Wealth of Nations V.1.137
Higher education is a vivid example of the emergence of institutional arrangements that are responsive to the organization and the agents of the organization often at the expense of the public.