Harvard, Yale, etc. could set a particular standard and increase enrollment to accept everyone who met that standard and (if logistics allowed) that could possibly be a good thing. In some ways the massive online classes seem to be piloting this idea.

However, if you go spend some time teaching at a community college, I don't think you'll walk away with the idea that somehow getting all those students pushed into a university would improve things for the community college students or for the ability to educate kids at the university.

Increasing enrollment might be beneficial, but past a certain point it is going to be detrimental to education.