Grade deflation does not exist here so much there is no inflation. You get what you earn -- that's the rule. So, you have to work really hard for even a B. The average GPA here is generally lower than at most schools.
It is not impossible to get all As and Bs...I know lots of people who do. But you have to work for it. Personally, I think that people exaggerate a bit about the work...lots of whiners who wouldn't have half the amount of work they have if they didn't spend all their time complaining.
You come to accept that your grades don't matter so much as whether or not you're learning. Learning is much more important than the grade you make in a class. I'm glad I took Bio 111 (Molecules, Genes, Cells), even though I did get a C, because I now know SO much about molecular and cellular biology. Maybe didn't have strong performances on my tests...but that doesn't affect me now.
Davidson has a good pass/fail system - you can retroactively pass/fail three classes during your Davidson career. Most schools don't have that. So, if you do so poorly on a class that it brings your GPA down dramatically...you can drop it altogether.
Graduate schools recognize the rigor of Davidson's course-loads. They probably wouldn't be too impressed with a super-low GPA, but for the most part, a 3.0 is respectable, and if you're taking courses that are right for YOU, you shouldn't have any trouble managing that. We have extremely high graduate school matriculation rates. Davidson students succeed in the world.
I was not a straight-A student in high school and am not now, but it doesn't matter.