It was really demoralizing, and to be honest it's had a negative impact on my life. My public high school didn't have a great math and science program so I started behind my classmates freshman year. It felt like the As basically went to the kids who had covered the material before in AP classes.
By junior year I was hovering around a 3.0, and I made the gut-wrenching decision that I couldn't go to medical school or pursue a PhD in biology because my grades weren't high enough. I decided I needed to set my sights lower. Even law school was out, basically business school was the only graduate school that would take me. I switched my major to economics.
It was devastating to give up on my dream, and I have to admit it still stings 20 years later. I adore biochemistry and would have loved to pursue research as a profession.
My main problem is I didn't know how to effectively study in college. I cruised through high school without ever really needing to learn from a book. I didn't really learn how to study correctly until a year or two after college, when I took the CFA exams.
Let me tell you, learning how to study (at 24) was an eye-opener for me, and it still feels like a superpower. I ended up becoming the valedictorian of my business school class a few years later.
I've had a very successful career as an investment banker, so I ended up fine. But I do think these grade deflation policies can be really harmful to the psyche of young students. Sure, there are benefits to getting humbled, hitting a wall and needing to grind it out, but students come into school with all sorts of different levels of preparation and there's a big risk that some will flounder.
I don't like relative grading. I think there should be objective standards of what you should know, and if you meet those standards you get an A. As long as you make those standards sufficiently rigorous, it shouldn't matter whether 30% or 80% of the class gets an A. Relative grading pits students against each other and creates an unhealthy learning environment.