Well, I think a reasonable argument could be made suggesting that Student B was likely to have a lower GPA than some of his classmates at a Duke, or a Harvard, just because of the talent level of some of his classmates. That being said, at some point, Student B's credentials should speak for themselves, and not carry the extra benefits of AA. Just graduating for a Duke or Harvard carries great benefits in itself.
The private schools are not required to admit certain numbers of minority students, so perhaps they provide weak examples.
But in response to saradsun, I don't think the goal of AA is to relieve the cultural baggage of race. In fact, AA is not entirely a race-based program. Women often benefit from AA, notwithstanding race.
Where else in life do programs like this exist (serious question, not rhetorical)? I don't think I can get into the NFL by being a little bit slower than other receivers, based on a lack of white receivers on a certain team (assuming there was a lack of white receivers.) Sports is a great example of how the BEST candidates get the jobs, regardless of race. They do discriminate on the basis of age in many sports, however (another topic in itself.)
But let's add or delete substance from my idea that admissions switch to a style where they consider extenuating circumstances solely on an optional addendum. What if they got rid of the SAT's and started having interviews? Seems like that might even the playing fields. What do you think?