I disagree; there's no objective criteria for what students should be "expected to master" in a particular course. it's inherently relative to what the typical student at that institution is capable of. a class where everyone gets an A is probably a waste of time for everyone involved. it strongly implies that more material could have been covered.
if a whole institution is like this, it gets back to the original problem. when everyone else is graduating with a 4.0, a 3.8 looks a lot like a 2.0 from a more rigorous school.
ideally, the material itself would be designed to get a good distribution of As, Bs, and Cs with a few Ds and Fs for people who didn't try or understand at all. but it's pretty hard to get this exactly right. better to err on the side of making things a little too hard. then the occasional bright student will really shine, and you have enough signal to compress the range into the expected letters at the end.