Deming was a statistician, and as such saw most "A" "B", "C", and "D" more the product of random chance then anything real. Or as one of his followers pointed out, how do you make a "A" ditch, A "B" Ditch, a "C" Ditch or a "D" Ditch when all you want is a ditch?
In the early 1950s he took his observations to Japan, which embraced them throughly (While the US rejected his observation, wanting to go with the "Best and Brightest"). At that time (the 1950s) Japanese cars were junk, as were most Japanese products. The Japanese embraced his concept and within 20 years had so improved their quality that "Made in Japan" stop being a mark of Junk, but high quality items. Why? Deming had told the Japanese you can NEVER be better then your worse input, so work on improving "D"s and "C"s not "A"s and "B"s.
When he taught Collage, his course were always pass-fail, for he could NOT determine how much better one student over another except by statistical error once BOTH students have mastered what was being taught.
In many ways, grade inflation is do to the fact most people can NOT determine how to use a "A" Student when the system is geared to the worse input i.e. "D" Students. Thus an "A" is more product of repeating whatever the grader wants to hear OR statistical error. Thus once hired, a "D" Student has as good a chance of doing the job well as an "A" Student.
My point is abolish the grading system entirely, go to a Pass-Fail system, that is what grade inflation is heading to for Employers want "A" and "B" Students NOT "D" students, just to do "D" work. As long as that is the case (and it always will be, employers want people who can do the work, and under a normal grading system a "D" student can) you will have grade inflation for image is more important then reality.
http://deming.org/http://en.wikipedia.org/wiki/W._Edwards_Deming