I first found out about curves in calculus class. The teacher gave an exam and the best test taker got about 50% of the problems right. The teacher said, not or worry, the grades would be curved. I did not understand why but it was definitely OK with me. I thought curves were for when everyone did miserably but the teacher for one reason or another could not bring him or herself to report accurately how the students did.
When I started law teaching there was no curve. Then, in response to some low graders there was a suggested curve. I do not recall if this cured the low grader problem but it definitely coincided with the "grade race" and grade inflation. This was in the era of student teaching evaluations and the beginning of vanity courses. High grades reduced the risk of bad evals and could pack students into vanity courses if one was known as an easy grader. I might add, this was also the beginning of the -- what to call it -- "do not hurt their feelings" era and anything might just do that. Actually, I do not mean to criticize this change since most of the harshness, I felt, was contrived.
So in response to a lack of grading norms (or one might even say collegiality) and complaints that the School's GPA meant that our students could not compete with others schools giving higher grades we, like may schools, instituted a curve. (I never understood the student competition argument. I thought law firm recruitment people would be bright enough, in a world of different curves, to rely on class rank. I was assured that this was not the case.)
So in this era of "be kind to students" the solution was to pit them against each other and ratchet up the competition. Grading became a zero sum grade. No matter how you cut it, if one student were given an A, it decreased the probability that another could have an A. Instead of grading on the basis of each student's merit most schools pit their students in a horse race. It seemed to be welcomed by the students because the numbers were high enough that all horses appeared to win. Eventually, though, they adjusted as they realized that B did not mean "good" but average or, in the case of most curves, below average.
There was, however, an even more bizarre twist. Although the advent of the curve meant that no student was evaluated on the quality of his her work, the argument was made that in some classes, the curve should be higher. The reasoning was that individual merit could be counted in some contexts and for some reason this was in small classes -- yes back to packing them into vanity classes.
In the name of being fair to the students this twist meant students were torn between taking small course in something they had no interest in or even scoffed at in order to boost their GPAs or taking classes that were often more interesting and more useful. In fact, most law schools, unless they normalize in some way, now have multiple curves. How many? As many combinations of high and low curve courses possible in an 88 hour teaching load. And, if they then rank the students on the basis of GPAs calculated on multiple different curves, they are being about as honest in those rankings as they are with their employment figures.