Admissions is high-stakes for everyone, including Harvard. Having some opaque, non-mechanical criteria lets them pick and choose without giving as much of a lever to lawyers.
Cynically - it gives them cover to manage to "other goals" and chalking it up to a subjective measure that can't be proved/disproved
While you and I are more tribally identified with Asian Americans, America's upper crust considers them a threat. An elite university is a gateway into the upper crust, so it makes tribal sense for them to limit their access on grounds that to everyone else looks blatantly racist but doesn't really feel that way to them.
If I had to wager a guess, I imagine that the upper crust justifies this morally by saying that without Harvard and other elite schools, no Asians would get to climb that ladder. And also to note that not even the paragons of democracy, the Greeks, were immune to tribal identification and social stratification and racist policies to enforce them. Sparta was especially egregious in this regard.
From Harvard's perspective, in order to maintain their prestigious reputation, they have to cater to the tribal whims of the upper class, even if they don't want to. Otherwise Harvard, well, wouldn't be Harvard anymore, the prestige will move on to other universities that are willing to play ball. Remember, it's not us that determines Harvard's prestige status, it's the elites. Expect Harvard to dream up an endless array of subjective metrics that pay lip service to inclusivity while in practice serving exclusive goals.
I believe that if we succeed in forcing an inclusivity agenda onto the Ivy League, then it'll just cause the elites to make even more ultra-exclusive educational institutions and send their kids there, revoking not just Harvard's, but the whole Ivy Leagues' cool card. While this will democratize Harvard, it will ultimately increase stratification and inequality.
Tragedy of the commons writ large.
Doing well in tech entrepreneurship needs brilliance more than great personality and political connections (they should be above a level but you don’t need a very high level of them).
Politics is still the surest route to power but billionaires are also powerful and have longer influence. If next generation moguls are educated elsewhere, the colleges with more merit based criteria should emerge as more elite.
A university's entire goal is to empower anyone to succeed. That's the whole reason they exist. If Harvard's reputation as a gateway to elite society is lost, society doesn't gain another one elsewhere. It's just lost. People that could succeed without college will still succeed. It's all those people that couldn't have succeeded without college, that went to college and gained the benefit of having an education there, that will lose that opportunity.
Imagine a world in which Harvard is only slightly better than Georgia State. That's what's at stake here.
These candidates who don’t get into Harvard but were contenders are not hurting for overall choice.
The Ivy League is a resource shared by both the commons and the elites. The belief stated at the end of my comment, that collective action taken to make Harvard more inclusive will inevitably strip it and all the other Ivy League schools of its vitality, will spoil that resource, forcing the elites to stop sending their kids there and snuffing the Ivy League's social ladder aspect out of existence.
That's a classic case of a tragedy of the commons. It's both a tragedy, in that nobody wanted that outcome, and it's driven by the collective action of the commons.
I thought you had some interesting economic point to make about these kinds of situations. So instead let me make one of my own. Economics isn't physics, it's broadly applicable to any kind of situation you think to apply it to. Any time you have a situation where you'd want to say, "this is why we can't have nice things," you're looking at a tragedy of the commons.
It's pretty common for someone with good intentions to institute a policy for deciding what they thought was previously disorganized and substandard. Instead, all they've done is create a way for powerful people to hide their choices behind the "objective" policy. The trick is that the folks in power control the inputs, even if they don't control the algorithm. As a management consultant, the client boss didn't tell me what to say, but they decided who I could talk to. Note the current trend in machine learning.
Imagine if Harvard had fed its past admissions into an artificial neural network! Maybe they could have hid behind that back box.