Not sure of your point. Pass/Fail was intended to ease freshmen in. (Most people didn't fail.)
Yes, poor grades were often a shock to people accustomed to being straight A students in high school. Though most made it through or ended up, in some cases, going elsewhere.
the same MIT that doesn't give out grades in the first year? (just Pass / NoPass)
the high achievers who scored solid grades to get there literally kill themselves when they pull Cs and Ds, even though it's a hard class and is sort of "look left, look right"