Partly the screening process of universities is entirely different - they are much smaller entities, investing a huge amount of resources in individuals, and have a much better and much more well-founded idea of what kind of applicants will be successful. And then, even they get it wrong all the time. Students drop out and the least promising ones turn out to be superstars somewhat later.

For that matter, I would prefer universities only screen for effort, meaning the applicants show they are willing to work hard enough. That doesn't exclude tests for prerequisites, but it excludes certain things like age, income, parents, irrelevant prior education, origin...