I recall an exam where a 60 was an A, and an 85 was an A+ (there were only 5 students with grades over 60 in a class of more than 100 students at Stanford). I do not recall whether a 50 would have been an A or a B. My daughters have both mentioned classes with exams that were just as tough. The toughest I can recall was an exam where any positive score at all was a passing grade. Some students did fail this exam.
I think that to some extent Harvard is already suffering a bit from a small amount of “reputation decay” based on this. This may be more of an issue in high tech, which is where I worked for my entire career.
I think that it will take a very, very long time, probably multiple generations, before this reputation decay adds up to being enough for the university to care, and at that point it could be too late to do anything about it. Of course this reputation decay might be reversed before it is obvious enough for the vast majority of the population to have even noticed.