A couple things:
1) My UG institution is not well-known for its grade deflation practices as it is a large public U.
2) It is a bit fallacious to say that just because I did better than my piers that my work ethic was highlighted to adcoms. For example, consider the case where the grading scheme is as follows: median is set to 2.0, 1.0 and 3.0 are 1 standard deviation below and above the mean respectively, 4.0's are only given to the top 5% of the class given that they also scored at least 2 standard deviations above the mean. In this example you could do significantly better than your peers, but still only end up with a 2.9 or so just because the grading scheme is THAT awful. Keep in mind that this was department-wide and not limited to 100-level weeder courses. You had some of the smartest of the smartest in your 400-level class and if you didn't do better than 83% of them, you weren't getting a 3.0.
Edit: Additionally, in the grading scheme put forth in (2), it may very well be possible that nobody can get a 4.0 because of a wide standard deviation or a skewed bell curve.
This is also a bit of fallacious thinking, as both my cGPA and sGPA were below the 10th percentile of all of the schools I was accepted to. It was bad. Maybe I'm just a special snowflake, but my GPA was in fact pretty crappy.