The problem with laying bare this purpose of these institutions is it destroys their credibility. If everyone knows it's just a social club, and that is formalized, it loses its prestige. It's beneficial to students who are enrolled due to family gifts that some students are enrolled due to being truly academically skilled. It furthers the impression the gift-giving segment may be skilled as well.
Hasn't this been the case for Ivies for generations? Maybe in the 20th century they moved away from the stereotype of East Coast prestige and old money to something more meritocratic, but that's probably been a few decades at best.
Again, it's the prestige of the social club that gives them credibility - not the academic excellence of its students. The students who have mediocre grades but very rich parents actually might actually have a better chance at success and bring more prestige to the university than the academically excellent student who have poor parents.
That might be too much of a reduction. You need academically successful members of your institution to get eye-popping headlines like "X discovered at University Y". Those PR pieces are partially responsible for the prestige. Concur on the point of family wealth helping institutions.
"X discovered at University Y" happens in graduate schools - not at the undergraduate level. And when you're admitting students in graduate school (excluding MBA and JD), you want the most academically successful members. There is no affirmative action for the physics Ph.D program at Harvard.
