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A C is only a bad grade if the student in question is capable of doing better. An average student should not be expected to earn above average grades or else the grading system is flawed.
This is, I believe, why C's are considered to be bad grades by many. The standard for grading seems to have lowered in recent years so that A's and B's are easily achievable by otherwise average students and a C is taken as a sign of failure. This obviously isn't the case everywhere, as many teachers, yourself included, seem to apply the grades the way they were meant to be applied. Unfortunately this comes as a shock to students who have become accustomed to earning A's and B's for average work.
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