| I teach university classes. In the past two semesters, two students have come to me, asked if it were possible with the grades they had already gotten that semester for them to earn an A in the class, and both times the answer was "probably not, but you won't get lower than a B" Both of these students then asked if they could take the class on the "Satisfactory/Unsatisfactory" scale, rather than the "A/B/C/D/F" one. (One other student arranged to take the class S/U before the semester started; her grade would also have been a B on the other scale.)
Now, officially, D and F are equivalent to an unsatisfactory grade and A, B, and C are satisfactory ones; but S and U grades are not averaged into the student's grade point average as grades on the other scale would be. So all these students are trying to avoid having a B (numerical value 3.0, where A is 4.0) averaged into their GPAs. One of them even told me she had never gotten anything less than an A in college, and she was a senior. (I will not comment further on the department of her major, other than to say that a friend of mine in the same department characterized the classes as ridiculously easy.)
When I was a student (at this same university, 1991-1995 undergrad) neither I nor my friends never thought of the possibility of using the system this way. I still don't think I would. To me, if I were actually looking at someone's transcript, I would assume an S were covering up a C, or was a lucky grade for someone who had arranged to take the class as S/U in the expectation that they would not do well and would rather not have a D or F averaged into their GPA. (I think the idea behind the whole S/U thing is that you could take electives and not have them drag down your average; you are not allowed to take courses in your major or that are required for all students as S/U.) However, if one is only considering how that one statistic, the GPA, looks, it might seem like the "low" performance would be hidden.
Personally, I think using the system to cover up a B (which is defined in the faculty handbook as representing "excellent performance" where an A is "superior" and a C is "average") is not what the system was designed for. It irks me that some of the students feel it is their right to get an A (one of the ones who wanted an S came to that conclusion only after spending most of my office hours that day complaining about every single point I had taken off on her last two assignments, both of which received Bs, and questioning the way the entire class was graded) and if not an A, at least not to have a B figured into their GPA. I'm not sure the S/U option even serves enough purpose to be retained at all at this university. And the students who want that S instead of a B are deluded by numbers and think that someone actually cares what their GPA is, though their future employers probably couldn't give a damn. | 
