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So, why the hell don't we give the little snowflakes all 4.0 GPA, and just let them declare themselves as whatever they identify as.

Given that grades aren't earned any more, why on esrth are we studying ways for people to learn things - that is not what it is about now. You go to college, attempt to destroy your liver and enjoy the college lifestyle, and get all A's.

Really, I've been proposing that each GPA be presented with the average GPA for students taking the same class sections. For some students, a 3.5 would be weak (if the average student got a 3.9). For others, it might be outstanding (if the average was a 3.2).

This also makes it more likely that students will take courses with challenging grades. If all a professor gives is A's I can't raise my effective GPA. But, a professor that gives a C+ average gives me the opportunity to decrease my denominator.
For more info on the problem check out http://www.gradeinflation.com/

The reason for this is that the more students they fail, the better they look.

This is also incorrect. Far more important in the school's rankings are (a) the percent of their admitted class to accept the admissions offer, and (b) a higher number of students who get job offers after graduating. This incentivizes schools to lower failure rates (US News and World Report reports graduation rates and rolls them into rankings because they know it turns off most prospective students), and also to increase grades to make their students' resumes look better.

Wrong. Tech schools are just as bad or worse as the rest in terms of grade inflation. MIT and Georgia Tech are above the trend (CalTech is not listed).

Not because I say so, because of the arguments I laid forth in my reply.

I wonder what percentage of administrators, professors and students at other universities also speak of grade inflation. Maybe less, maybe more, but I don't see why Harvard is getting singled out. You say "various studies have demonstrated this to be true." What studies?

Don't be intellectually lazy. If you just google the term, you might find the Wiki page chock full of references -- for the ADHD crowd, here's a page with lots of easy-to-understand charts

The conclusion: Grade inflation is massive, even if you try to adjust for purported quality increases by using SAT results. It happened across all private schools (with the notable exception of Princeton, who put in some radical measures to curb it in 2004) as well as most public schools. Harvard is not exceptional.

When the GPA there keeps going up and up ?

http://www.gradeinflation.com/Stanford.html

It wouldn't be surprising if people lied (or at least were mistaken) about their GPA. (Indeed this was something I didn't at first think about when I read the piece.) However, grade inflation is real. (Lots of data at that link.)