Undergrad students? If it’s a CS class and not one of the intro to programming/algorithms ones you’re probably mostly checking if they read the book they were forced to buy (thanks ACM) so I would say it doesn’t really hurt them.
A student who gets an A when they should have failed the course may be wrongly encouraged to continue in that direction when they really ought to change programs. This could end up costing that student a huge amount of time and money, to the point of jeopardizing their ability to graduate and ruining their future.
Failing grades aren’t supposed to just be a punishment for not studying hard enough. They can be a warning sign that the student may need to try something else.
Depends on the school. All of my math classes and most of my CS classes at purdue were bell curved around like a C+/B- and you had to get a C to pass the class. Thus, a portion of each class would not pass and be effectively forced to retake the class to learn it better or switch to an easier major.
What schools do you have experience with? Also, never heard of ACM so I have no idea if that was used whatsoever for our classes.