I think the professor needs to look at the exam and ask him or herself if it evaluated what it was supposed to evaluate. If so, and everyone failed, then they fail. If not, curve it up and work on the next exam more accurately measuring what they need to be able to know/do.
I am in no way suggesting that a prof should give everyone a passing grade if they do not master the material, concepts and application of those. But let them “compete” against the work expectation, not each other.