Nope. I have an undergrad GPA of 0.00, and I'm proud of it.
In all seriousness, yes, I worked my butt off. Because the profs had really high expectations of us, and many would unsat you for C-level work. But you are right, there is a big danger that people will slack off, and you get plenty of rope to hang yourself if you do slack. The attrition rate was 50%; a lot of people ended up dropping out of school because of too many unsats. (Even though the unsatted classes don't show up on your transcript, if you unsat too many classes, you'll unsat your academic contract, which means that you flunk for the entire SEMESTER, even if you did sat some classes.
) The program is one where students are expected to study independently and have a large hand in designing their own curriculum and educational experience. It's kind of like being in grad school, or also, Yale's med school program is pretty analogous to it, actually.