"If every student receives an F for a 40% correct (and they all only get 40% correct), a curve normalizes that. Students who understand the material as it was presented and tested better than others receive a higher grade."
If every one in the class was lazy to study/prepare for the exam and every one ended up getting less than 40% correct, then they all deserve to get F. Normalizing with a curve means, it's possible that someone who got only 39% in that exam in a class full of lazy folks who all scored much less than him, can earn a A or A+ ! Compare this to similar class/exam taken by different set of students (all brilliant) at a different time or place, who all worked hard and scored above 80% but still some of them could get B or C's due to curve grading. Wouldn't it be unfair to the 80% scorer who got a C whereas some one who scored a 39% on the same subject got A+ due to circumstances (time and peers he took the exam with) !! How is that fair at all?
This is an invented objection. In reality, in classes of sufficient size, there is always a subset of students who work hard (or are extra smart, or whatever), a subset who is average, and a subset who slacks, or just doesn't understand the material well. The objection that there might be a mass class conspiracy to all score 40%, or that everyone in the class will be lazy, just doesn't make sense.
Who says it's a conspiracy? It's more a matter of culture. I have seen it happen: there's a trend in the class where the homework grades, on average, are high, but the exam grades are low, even though the material is mostly the same. This happens at reputable schools and at "low tier" schools.
It's quite difficult to write new tests that are unique enough not to be trivialized by access to old exams but of consistent difficulty semester after semester. Even if you could it might not give the result you want: if your university moves upmarket or the high school preparation in your subject improves should the average grade in your class increase to reflect these exogenous factors?
It's hard enough writing a good exam -- maximally descriminating, useful pedagogically, not unintentionally ambiguous -- without also requiring it to be mechanistically translatable to a semester grade.
If every one in the class was lazy to study/prepare for the exam and every one ended up getting less than 40% correct, then they all deserve to get F. Normalizing with a curve means, it's possible that someone who got only 39% in that exam in a class full of lazy folks who all scored much less than him, can earn a A or A+ ! Compare this to similar class/exam taken by different set of students (all brilliant) at a different time or place, who all worked hard and scored above 80% but still some of them could get B or C's due to curve grading. Wouldn't it be unfair to the 80% scorer who got a C whereas some one who scored a 39% on the same subject got A+ due to circumstances (time and peers he took the exam with) !! How is that fair at all?