Yes. Of course the questions are much easier, but when you consider the number of marks required for each grade, the marks/percentage needed for a C could be equivalent to that of an A/B on a higher paper - looking at marks alone.
Whereas at GCSE higher the marks needed for a C are really quite low (compared to A level!). The sort of people entered for foundation probably don't like exams at the best of times, so despite the questions being easier, many probably just 'switch off', don't bother and ultimately don't scrape together the high number of marks required for a C, instead getting lower, which is no use and they have to resit in college etc, wasting everybody's time. It'd be better to put the effort into learning slightly harder content to get a C in higher, this probably involves both teachers and pupils alike. In fact I remember in maths some textbooks differentiated certain questions to different grades so in theory those aiming for a C could just master all the C/B level questions and miss out the A questions and possibly get a C?
For example in Edexcel maths last year:
Higher: 65/200 for a C
Found: 139/200 for a C.
Doing higher seems to be 'better value' for marks.