What do "C"s and "B"s actually mean?

So here is my conundrum, and tell me if you track. The definition for "C" (grade wise) in most everything I have seen, is "Minimally meets expectations." This statement on its own makes sense. It is written in plain english.

The expectations for B.C. are very clearly laid out in the Proscribed Learning Outcomes (PLOs) and Suggested Learning Outcomes (SLOs). The PLOs make up the big picture, and the SLO fill in the finer details.

So the solution seems clear at first. If you answer some questions correctly but not others, then you get a C. And if you answer all of them correctly, you get an A. Right?

Well the answer to that varies, and is where I have an issue. The definition for a B, not A,  is "fully meets expectations". So if you get 100% on a test, you should get a B, right?

Well what does that leave for poor lonely A? It's definition is "Exceeds expectations", but if you are expected to know all the PLOs and SLOs, then how can you exceed those expectations.

This problem would likely drive me insane, if I wasn't lucky enough to have a Faculty Adviser (FA for those of you "In the know") that was pretty tuned-in to the whole assessment thing. Now I don't mean to beat a dead horse, but the solution to me seems to be Bloom's taxonomy again. The expectations are that everybody fills the bottom two rows, Knowledge and Understanding.

This scratches my itch, but it creates another more disturbing one. I received my fair share of A's in my academic career. I don't ever remember assessing, evaluating, or synthesising. Sure in English class I would write essays, but typically that was just regurgitating what the teacher had said. Essentially it was knowledge, often it wasn't even understanding, but I dotted my i's and crossed my t's and didn't dangle my participles, so I got my bright shiny A.

What do you all think? Do we give out A's too easily? Are we not challenging our students enough? Or are Tests just to see who can get a B, and the assignments and activities there to see who can reach the A level?