A few arguments why grade inflation is good and I agree with him.
http://www.usatoday.com/news/opinion/editorials/2004-04-21-coplin_x.htm

Grade inflation probobly reflects a number of things: students can now drop a course later in the semester than before, allowing students who don't do well to not enter into class grades (and allowing them to explore other fields that they might be better at without having a big D or F in the books; better quality of teaching for a number of reasons, better teachers, better technology, more applied research on how people learn; students are improving.

Grades are not rated by graduate schools or employers as the most important thing. Other experiences and skills are much more important and if students are struggling constantly to get their grades up higher due to counter-grade inflation measures, they will have less time for developing these other abilities.

Thus grade inflation is ok and the world isn't over. Any other sides to the story?