Going to a Honors instead of UCB, or going to UCB instead of Stanford would be fine. But being unable to go to your ABET accredited state university and unable to pay for a need-conscious and don’t-meet-need private collage because of a even lower grade seems a good reason to freak out to me.
Most kids don’t have illusion of going to Ivy, but grade still matters a lot to them. There are a lot less opportunities for current students with low grade than our generation had. Whatever worked for us, or working for top performing students of their generation won’t work for the majority of them.
And that’s why they freak over grades.