You may think so but this would be going against the facts. In reality, there are two major goals each US university has: 1. attracting funds (in the form of tuition, grants, etc) 2. improving educational statistics for the state The second goal is related to the first and, in the case of a public school, dominates. The more diplomas the university awards, the more funding it usually gets (since it improves 'retention').

Universities certainly have great facilities for learning and if a student wants to learn, s*he certainly can but this is irrelevant from the point of view of the administration.

Lest you think this is another conspiracy theory, I have heard these two exact statements in every faculty meeting we had at the university level. How can I care about grade inflation (as a faculty) if I am penalized for the excessive number of withdrawals from my classes. Think about it: the students have realized that they were not ready for the class early, and decided to save themselves the headache and take a lower level class. This is counted against the faculty. Now what incentive do I have to give objective grades?

Agreed. But also, there's no point in giving grades if they don't mean anything. If you expect everyone who puts in nominal effort to get an A, then the class should be pass/fail.

I wonder if an explicit policy that grades are for internal purposes only would help. That is, grades are useful feedback on how well you're learning, but they aren't comparable between classes and aren't intended to judge or rate students. So the uni would refuse to calculate GPAs or report grades to outside parties.

Maybe they could even give more flexibility on how grades are calculated and reported. Like they could be whatever combination of pass/fail, letters, percents, notes etc that the prof wants, because by policy you're not calculating with them.

There’s a reason why despite MIT putting their courses online for free, people still attend the university.

Learning is not the only reason to go to university, and it’s probably not even the primary one anymore.