Lenders haven't been good at pricing risk. If risk was priced appropriately, lower grades would provide a better net return than higher grades. Higher risk should correlate with higher returns. Therefore, the return on Ds should be higher than the return on Cs
However, the return on As should reasonably be higher than the return on AAs, the return on Bs higher than the return on As, the return on Cs higher than the return on Bs, and so on.