I wonder if your feeling is a prevailing thought/sentiment among liberal arts professors. And if it is then why don't you and your ilk just give out more B's and C's? So what if they cry? If you think they deserve the B or C then that is the grade.
But what do I know I only have a degree in Electrical Engineering.
See the books Academically Adrift, Beer and Circus, The Marketplace of Ideas, and, to a lesser extent, the post I wrote above. Grade inflation is sufficiently well documented that most academics now take it for granted, especially because they see it in action.
This gives us two solutions. First, is to convince naive kids that it's OK to be something other than a lawyer or doctor. Seriously, any students reading this comment, pay attention: There are plenty of other wonderful (and lucrative) professions in the world. If you genuinely care about medicine or law, you should certainly pursue those degrees. But if you're only concerned with career earnings and/or prestige, well, I have plenty of out-of-work lawyer friends.
Second, the academic industry (and it is an industry) needs to place less emphasis on grading and more on education.
I can hear the objections now: "Wait... you mean schools don't emphasize education?" Sigh... we'll save that for another discussion.
The universities are thus in sort of a bind. They do an enormous amount of assessment, but the people who benefit the most from accurate assessment, namely industry, don't bear the costs of it. Their actual customers, the students who are ostensibly paying for an education, in essence demand an inaccurately positive assessment instead, because it achieves what an education achieves (get far enough in the door at a corporation that it would be a pain to fire you) with less labor input from the students.
The universities can't just stop focusing on assessment - like I said, I think it's actually more valuable than education. They need to be replaced by some industry-funded institution whose sole incentive is to provide accurate assessment.
The problem is with law school, medical school, and so forth. That is where GPA is seen as the ultimate-judge-of-worth rather than a mildly-interesting-but-completely-insignificant-number like it should be.