Also grade inflation sucks.
First of all, it's bad for the students themselves. The lowered cost of getting higher grades disincentivizes achievement, and students end up learning less. Second, it makes things harder for businesses and society as a whole to be able to sort competency. If grades weren't based on a finite scale, then grade inflation wouldn't be a huge issue, but since they are, the sensitivity of the grading scale fails. Two students with 3.8 GPAs may be drastically different in actual quality but the system doesn't signal that, and they're going to receive the same job offers from businesses because businesses can't tell. This leads to more employer/employee mismatches, a costly process for both employers and employees. Employers have to spend more money to properly test the capabilities of their employees, meaning lower starting wages for job searchers.
Furthermore, for schools like mine with lower-than-average grade inflation (for high-level liberal arts colleges at least, my school is nowhere near the level of inflation of Ivy League schools despite ranking similarly or better on most CollegeBoard lists) this can lead to even poorer signalling of competency, as all employers will receive is a superficially lower GPA, which is only combated by the reputation of the school (a tenuous resource at best, but arguably more meaningful than a high GPA from an Ivy League school).