Well, it is because they probably aren't aware of the problem. I don't know about you, but I find a bit funny and at the same time confusing the rules for college grading the US.
First of all, how can anyone guarantee that translating a number into a letter grade will be done uniformly across disciplines and also professors. As much as people claim that Chemistry is harder than History, or that Physics is harder than anything else, :P , an A in one class should mean the same in another: that the student has learned everything (or most, since the A-grade represents a range) that was expected. For all I can tell, getting an A means being in the ~10% of your class, even if the top student only has a max numeric grade of 80-85. I don't think I will ever understand this idea of curving, but if everyone plays by the same rules then I can see not many people complaining and having a more or less fair process. Maybe not representative of the true learning done by the students but at least fair.
There is, however, another issue that only came to my attention after I was on the other side of the line, not as a student but as TA and that really, really troubles me: If my final letter grade will depend on how everyone else does in the class, I better fucking know how everyone else in the class did.
Case in point: One student, who didn't show up for class in a regular basis, gets a final numeric grade of 77. Another student, who religiously attended lecture gets a 74. According to the letter grade breaks, both of them got a B but since the professor knew the 74 student and thought this person put enough effort, he bumped the student's grade up to an A (which given that semester's distribution was a 79 and above).
This, unfair actions in my opinion, will continue to happen because students are not allowed to know the other students grades. The B student might just think he/she was too far away from an A and leave it at that. I know I would be bothered by the idea that someone else who did by the quantifiable standards worse than I did got a better grade because the professor thought better of them than he did of me. I'd like to complain, but if I can't see that someone who did worse than me got a better grade then I have no proof and will always lose the battle.
I really don't know how often this type of situation happens but I have the feeling that it occurs way more often than I think it should. Plus, it just doesn't make sense that in a highly subjective grading scheme showing all the data (in this case grades) is forbidden by law.
I get it that some people might feel bad if their peers find out they got a failing, or barely passing, grade and they need some sort of "protection". But I am sure no one intended having these privacy laws to abuse the system.
Burton Richter Dies at 87
3 hours ago