Put another way, if I am hiring a student for writing, physics or engineering I don’t necessarily care if they are better than their peers as much as I care if they can write well, solve the math or engineering problems to get the write answer.
Finally, take law school as an example. LSAT scores, which are considered a reasonable proxy for IQ testing, are significantly hiring now for top schools than they were 30-40 years ago. That supports the thesis that law students today have a higher aptitude than previously so if grading is an objective measure of performance rather than a comparative measure of class rank it’s expected for average grades to increase.