It will inherently be a contest as long as admission rates are below 100% and schools' reputations are non-uniform. If you shake up admission criteria to be more holistic and less weighted on academic performance, applicants will refocus their attention and compete to satisfy the new set of criteria (at least those within their control).

I definitely wouldn't argue that colleges are optimizing for greatest societal benefit, but it would take a lot to truly align their self-interest with a selection process that doesn't heavily consider academic performance (particularly for private universities).

To address your point, though, I'll assume your use of "admissible" is synonymous with "admitted" students. An increase in rates would require that the number of admitted students increase relative to the size of the applicant pool. If the applicant pool increases with the number of admitted students there isn't necessarily an increase in the rate of admission depending on the relative increase in the size of the applicant pool. If we instead define "admissible" as meeting criteria for admission but not necessarily being admitted, I wouldn't be surprised to see a corresponding increase in admission standards to maintain existing admission rates. Interested to see if anybody has evidence to support or refute this based on historical trends in admission criteria (GPA, SAT, etc.) vs. admission rates.

I think this is what they're doing, and it's really hard to do that for a 17 or 18 year old kid beyond grades, test scores, and extra-curriculars. What would you suggest?