Grade inflation started long before “Equity.” Its a simple marketing fact. Kids aren’t going to stay in college if they flunk classes or get below a “C” in classes. Above all, colleges want $$$$$ to keep coming in. The students are their customers.
I think grade inflation began about the time colleges started having student evaluations of professors. Professors who graded hard got lower evaluations from students. If you were not tenured then your job might be at risk for having low scores on the evaluations. I think this became widespread about the end of the 1960s.
That's part of it. But also, if a teacher gives an F, the student can cry racism, sexism, favortism, bias, sexual harassment, whatever. They might possibly sue. At the very least, they can create a major headache.
It's way easier to affirm and celebrate everyone.