I'd love to hear from front-line profs about this issue- does grade inflation need to be addressed?
First is the ever-growing methods of academic dishonesty. I do not have enough hours in my life to create and design new homework that prevents cheating. It's possible for some assignments, but not all. I don't give up on cheating detection, but this leaves tests and participation (be it simply turning in work or in-person) as the primary grade-changing events for many students.
Second is the issue of student "litigation". It is not unusual to find a student that will fight to get their 4.0 by attrition, and that requires very good record keeping on the professor's part, taking away from time for other tasks.
My situation is at an extension of a very large university. We focus on teaching and student connection, not research. I know that these experiences change drastically when professors have graders and a research program taking their time away from teaching duties.
It's widely held that student evaluations are proportional to the grades that the students expect to get. My office mate, and a professor, were co-teaching a course, and they got into shouting matches about grades, because the professor was up for tenure, and wanted better evaluations from his students.
In addition, students will badger their teachers for better grades, and dealing with it adds to the workload and stress of teaching. After each exam, I had a line of students at my door, asking me to review the grader's marks.
My view is that it's always marginally easier to give out higher grades, even if there's no overt pressure from above.
The sad thing with teaching evaluation is they are collected while the student was doing the subject. I can't tell you how many of my students complained like crazy about the subject while doing (what you expect me to work), who a year later told me the subject was the best one they had taken in their whole degree because they had learnt so much.