How is grading by curve fair at all? Are there any arguments in favor of it? Per definition, grading by a curve usually means that the students are assigned grades based on the statistical distribution of the test/exam results. No matter what, say 20% of students will always fail, and only say 10% will get a perfect mark.
I see a number of serious problems with this, and I fail to see anything in favor. In my view, for a fair system, the following are necessary; and neither are fulfilled by grading by curve:

A test/exam should have clear and absolute rules and requirements. Here, the students do not know what are the exact requirements to get the result they desire, as the point limits are, obviously, only known after the test/exam.
The grade of the test should directly correspond to how much of the course material did the student learn and understand. The fact that the same ratio of comprehended material can give an A in one year, then a C in the next year,  tells that the requirements of the course itself are also very unclear.
Similarly, the grade should directly and absolutely reflect the knowledge of the student. An A+ should worth the same every time in the same test. But here, the grade only reflects the student's knowledge relative to class members. It can't be correlated to the amount of learned knowledge.
The grade should only be influenced by factors under the direct influence of the student. Here, the mark depends on factors like how &quot;bright&quot; are the other students, how much effort they put into preparation, and even on whether they cheated. Hence, the student's mark is influenced by circumstances completely outside of his control, and unrelated to his knowledge.
No matter the collective results, a given number of students will always inevitably fail. If almost everyone is a genius, there will be the same number of failures as if everyone did poorly. Good students may fail, and bad students may pass. In a similar way as the point before, a student shouldn't be faced with the negative, possibly serious, consequences of failing, just because by chance there were a lot of very bright students in the class.
Also, it creates and encourages an unhealthy and harmful class dynamic. Ideally, the students help each other in preparation. If an otherwise smart student doesn't understand some part and is roadblocked, others would explain. If a student missed a class due to valid reasons, classmates help to give and explain the missed material. But learning by curve creates an artificial race situation, where the students are actively harming themselves by helping others. Decimating the collective amount of obtained knowledge, this goes against the very spirit of education.

All these problems, and I'm struggling to come up with any argument in favor of grading by curve. In fact, I see only two cases where it may be used, and both of them are a fault of administration:

The department expects an exact number of students to pass the course. This is against the spirit of education IMO. If a student is good enough, he should pass. If not, he shouldn't. Regardless of others.
The responsible teacher failed to set exact, absolute, and clear requirements, and/or is lazy or unable to do so. Because of his fault, the students are exposed to an unfair grading system.

Am I missing something here? Are there any objective arguments in favour of grading by curve, and what are these? If not, or they are weak, what are the reasons it's still used, apparently widely?
My firm belief and policy is that a student's grade should depend on their own efforts and nothing else. In that case, curving the class is actually just wrong.
But my grading policy is pretty different from most. First, I use (used, actually, as I'm retired) cumulative grading. Every student task was assigned a point value and those added to, say, 1000. If you did a 100 point task, you might get 90 points based on assessments of quality. The breaks between grades were defined, say 900 to earn an A.
Second, I permitted rework if a student earned less than they expected to earn, but rework only got you back part of the lost marks. Therefore, I didn't get complaints about strict grading. &quot;If you want more points on this, do a better job of it&quot;. This also allowed me to encourage students to do better work and rethink poor assumptions.
Third, I assumed that I wasn't perfect and that I occasionally was overly strict, so a student never missed a final grade by what I considered an infinitesimal amount. 899 points didn't mean a B.
When I came time to assign final grades, I'd look at the earned distribution and make a decision whether that represented what I thought they had actually learned and I might adjust all grades upwards (only upwards) a few points if I thought that, at that point I'd been too strict along the way.
I had the reputation of being very demanding, and I was, both in the quantity and difficult of work. But I was just a bit less strict than my reputation. Students after the last class were never disappointed when they saw their final grade. They were able to compute it along the way, and they might learn that they did a bit better than their expectations.

No student should suffer in a class simply because, just by chance, there are a number of genius level other students.
Curving, is, I think, an admission of failure of the admissions system itself, which tries to predict that admitted students will be successful. If the system is set up so that some are guaranteed to fail then something is extremely wrong.
Expecting that the distribution from one year to another should be the same in an individual course is also foolish. The students aren't randomly selected from a known distribution in large enough numbers (for a single class) that statistical assumptions have any validity. Some years the students just work harder than in others. Some years they have to deal with things (pandemics, say) that make their work much more difficult.
Grade individuals, based on their performance. Make it possible that the performance can be good or can improve. Don't assume that the students in your class don't really need to be there. Be a teacher, not a grader.

Also see this question and my answer there.

Note: To make rework possible and not overly burdensome on the grader, students turned in work on paper. For rework they also turned in (in a folder) all of the previous versions that had been commented by the grader. They also highlighted, in the new work, changes to the most recent version. It was easy and quick to see if additional points should be awarded and easy to mark up the latest document with suggestions, etc.
This may not scale beyond 30 students per grader, I realize. I know that at 40, scale starts to be an issue.