Earlier quoted context omitted.
Grades are relative to other people. That's the point of places asking for GPA. If you were just evaluating your effort / learning, your grades could just say "learned a lot" or "made a good effort". But GPA is a way to discriminate between potential candidates for schools/businesses, and thus needs to be quantifiable and comparable.
No, not at all. GPA tells the difference between "mastered the material" and "did well enough not to get expelled" which can be a useful signal for an employer, but universities and professors don't view it as their responsibility to sort students for industry's needs. For starters, the quality of students is not uniform across universities. Middle of the pack at Harvard is a very different thing from middle of the p…
With few exceptions there is no mastering the material, or at least there shouldn't be. Not in college. There's always more complex material you can use to differentiate students. When you grade on a curve the test should be difficult enough that even the best students will typically get at least one question wrong, with most students falling along a nice bell distribution. (I say most because it's probably better to err on the side of a handful of students clustering at the top rather than at the bottom, especially if the bottom means flunking out.)
This can be more difficult for smaller, seminar style classes. One solution is giving the professor leeway to shift up and tighten the curve so he's not forced to give Fs or Ds. These classes are usually in the latter years of a program, particularly in undergraduate, where it's less important to winnow students out and ensure challenging curriculums.
That latter point is important. If you don't enforce some sort of statistical distribution how can you gauge the quality of your curriculum? If everybody is getting As is that because all your students are smart and disciplined, or because the material is too simple? If you require a bell distribution, then the curriculum will by necessity be a good fit for your cohort of students. In this way a university can maintain a quality curriculum without having to resort to external metrics or comparisons with other schools.