Tenured professors do often fail large swathes of the class, and it's not hard to stand their ground because academic freedom is still very important in universities. This is not generally true for non-tenured and adjunct professors, but for a different reason -- their job review rely on a large part on student feedback forms, and failing students are not happy students.

The idea that if only all professors stood their ground then somehow students will be motivated to study doesn't pan out in practice, though. There is already a significant number of students who are perpetually struggling. They are missing basic prerequisites, and instead of catching up on them, they repeated try and fail at learning the same materials, passing only when they got a lenient instructor. The problem compounds because failing brings helplessness and exacerbates their mental issues, which brings more failing. The university cannot sit on their high ground and watch these students struggle, especially if their number reaches a critical mass.