That episode is meant as a wake up call for kids getting out of high school or college. The liberal education system is dumbing down kids these days, and it's trying to take out the winners and losers and keep everyone the same.
Some schools are making policies against giving kids failing grades because it may hurt their self esteem, or every team playing a sport at school may each get a trophy even if they came in dead last.
The real world doesn't work like that. Some people win and some fail. And no one is there to make everything even for everyone.
This country is headed towards socialism, which is not good. I found some good google search results on college professors conducting experiments in their classes. Long story short, the whole class failed when they agreed to have everyone's test score averaged together. The A students quit studying because they wouldn't get the grade they deserved, and the D students quit studying because they thought the A students would bring them a higher grade.