>>But somehow many students seem to take it as the end of the world not to achieve that A, when really that isn't the important thing at all.

It IS the end of the world because it directly affects your job prospects after graduation. That's what it really comes down to. Most HR departments put a disproportionate amount of emphasis on GPA. When looking at two candidates from two equally popular schools, the candidate whose exams were easier will be preferred because, with the same amount/level of knowledge, he/she got higher grades.

It doesn't end there. The success of graduates in the job market ties directly back to the popularity of the school, which in turn determines how much funding the school can ask for in the state budget.