[Kuiper]

A significant portion of the undergraduate population at my school receive scholarships that are recurring on the condition of maintaining a 3.0 GPA. We're talking non-trivial amounts, on the scale of $18-22k scholarship money per year for a school that costs ~$45k/year. For students receiving these scholarships, grades matter significantly, and it can become an economic question of whether they'd rather continue pursuing the engineering degree and graduate tens of thousands more in debt, or switch to an easier set of courses that will allow them to retain the scholarship.

I think a lot of it also has to do with expectations from parents. For a lot of students, graduating with an engineering degree and a 2.5 GPA will leave mom and dad less happy than an English degree with a 3.5 GPA, even though the former is more likely to be useful in the job hunt.