Is it fair to offer students a chance to improve their grade on an assignment A large portion of students in a class I'm taking did very poorly on the first project that was assigned in the class. The professor has decided to allow students that did not get full points on the project to increase their grade on project 1 by a percentage of their project 2 grade. 
However, the way the that increase is calculated does nothing for the people that did project 1 correctly and received full points. I feel that this is an unfair application of extra credit as it only rewards those that didn't do the first project correctly. Am I being reasonable when I see this as unfair?
You don't indicate where you are, but I'm going to assume the US or places with similar systems.

What is the meaning of the final grade in a course? You can generally look in your handbook or catalog for the definitions. You won't find "was better than classmates" in the definitions, I'm quite certain. (Which is why I detest curve based grade assignment.)

Instead, grades are supposed to indicate a level of performance or degree of learning. Say a course had only two exams. A midterm and a final. If someone gets an F on the midterm and an A on the final, how do we reconcile those grades? If the course is progressive in nature like mine, I may be inclined to assign a grade of A because that represents the final mastery: I don't care, actually, that someone couldn't do X at the midterm if at the final they demonstrate X and Y.

A different student who made an A on both might be mad, but why? In both cases, at the end of my course, they demonstrated X and Y which was ultimately the point of my class.

If a professor allows students to redo work, in effect they are saying "well, you didn't demonstrate proficiency, but for this course it is necessary for you to do so, so let's see if you can on a second chance". 

At the end of the day, if you feel your performance was better than theirs, and make the same or higher grade than them, why should you be concerned?