For us, challenge and high grades are not reverse correlated. That is, DD's more likely to bomb an easy class and get a low grade than a harder one. Probably due to a combination of boredom, overconfidence (I don't have to pay attention, it's all too easy), and over-thinking.

In addition, learning to work hard and fail well are some of the most critical things she can learn to make it through both college and life. She'll never learn that going for the easy stuff. I'd rather she get into a decent college with decent grades (but knowing how to hustle her buns and pick herself back up when she falls) than a top college without those abilities.

Now, we're still in middle school (barely) so my attitude might change under the considerable pressure of the university admissions frenzy... but I hope not.