Supply and demand, just like capitalism. Naturally... these are all private institutions we've been talking about, are they not? As such, are they not allowed to make whatever business decisions they choose?
An important point in the article was that these colleges are producing future American leaders. As such, they presumably have a duty to pick based on merit, not on fuzzy factors.
Not to mention that these universities aren't "private" in the real sense of the term. Each one takes in hundreds of millions of dollars in public funds
every year. An enormous percentage of this income is indirect costs on grants (as high as 60 or 70% of the total grant at some places and more than 50 at all or most of them). Indirects can be used almost as the university sees fit. This gives them a duty to the public, and admitting dimwitted little Junior because Mummy and Daddy ponied up a donation does NOT fit the public interest.
But gotta say that enough money to build a new library or a new science facility that thousands of students will benefit from over the years is worth something to the school AND the student body.
But the damage Junior and his frat buddies did to the world economy a few years back is, IMO, not worth that library.
