A C means exactly that you only mastered 70% of the material. You got 70% of the questions right. You knew 70% of the answers. And then you end up remembering even less of it after the class ends. Tell me you know any basic science better now than you did right after taking the course.
I just think you're tainted by your situation (which is very unique) with regards to grades as you are clearly an exception. I couldn't find anything about the PCAT, but it seems that the MCAT (and undergrad GPA) is quite a good predictor of med school success (this is not apples to oranges).
http://www.ncbi.nlm.nih.gov/pubmed/16186610.
Again, find me someone who says I would prefer the C student to the A student. No one wants the student who is just satisfactory. They want the best. Grades are good predictor of success in treating people since you need knowledge (which is measured by grades) to treat patients. On average, the better performing student will make the better practitioner, and I don't see how you can continue to argue that is a wrong assertion.