That's depressing to hear as a recent grad. Why would CGPA weight this much after 7-8 years in the industry when you've passed the technical part of the interview?
An indicator of consistency / consistent performance was what I was once told by an HR of a billion dollar agri company that also screened candidates based on their scores starting from 10th standard / grade (in India the 10th and 12th school exams are considered important "markers" in our education system as they are national exams). Huge variations between a candidates score in 10th, 12th and every semester of college was treated as a potential red flag by them. Candidates with good experience and qualifications weren't immediately disqualified but were asked to explain the reason for the "fluctuations" in the interview. Experience did matter more, but their logic was the job gets more and more stressful as you rise up the ladder, and so it was important to consider your grades too as they reflect something about your personality.
By that token, the fact that I went to a prestigious and selective university (where I bombed with the 2.3 GPA) vs. someone having gotten a higher GPA at an easier/less selective school would seem like it ought to carry some weight, but I don't think it ever has - and I think it shouldn't.
(Perhaps cultural context also comes into play here - A British banker had come to India for some conference. After learning about how the banking industry in India is, he asks one of his fellow indian colleague on why indian banks asked for a college degree for a Clerical position, where as British banks in UK stipulated that high school diploma was enough for such positions. The indian guy replied, "When I can get a college graduate for that position, why would I hire someone with a lower qualification?".)
It doesn't, of course. They're doing this because they're clueless, and hypersensitive to any superstitious indicator that you might not be the "perfect" fit.
That (and applies to HF types), a very deeply ingrained sense of elitism (and a the supposed link between high performer status and "native ability"), of course.