I agree w/ your argument, but there are probably other factors that have changed w/ college applications.
The article seems to disagree w/ my point below, but from my anecdotal vantagepoint, I think there is a kernel of truth to my opinion: I see many 2nd and 3rd tier schools near me (I'm in the eastern US) opening themselves up to foreign undergrads. I don't know the reason for this, but my suspicion is that these schools need to stave off the onslaught from entities like Coursera and edX. As such, they are trawling from bodies, wherever they can get them. I've met numerous foreign undergrads who can barely speak English and my thought is usually "How could the University of _______ accept you in good conscience and move you toward graduation when you can't even understand your lecturers?"
e.g., I taught a class at a local university a few years ago. Class saw an influx of students from 1 particular country over a few years. Most of the foreign students from this country could barely speak English and it was obvious from "pop" quizzes that they didn't understand the material (which is understandable if you can't understand the language). They all tried to cheat on the exams (using a remarkably elaborate scheme). Eventually, I figured it out and I failed them. The mastermind emailed me and said that he knew he did not deserve to pass, but if he failed he would need an additional semester to complete his engineering degree.[1] IMO, the university behaved unethically by admitting these students into a system that they are not equipped to legitimately succeed in.
Anyway, I assume that if you increase your applicant pool from outside the US, the acceptance rates will drop--at least for a little while. I know that's not the only reason for the drop, but it might be part of the issue.
[1] After that, I stopped getting students from that country in my class.
Some of the ways colleges can combat this on their own is by trying to jump the rest of the system through early admission (that creeps earlier and earlier over time), or by giving out exploding offers (I don't think this is nearly as common).
The solution is to go to a deferred-acceptance algorithm such as Gale-Shapley. It's a relatively minor change, adding a third party that matches students to colleges algorithmically. The students send in a rank-ordering of the colleges they wish to attend, and colleges send in a rank-ordering of which students they'd prefer to admit (along with quantity). The students get their most-preferred college that likes them enough to admit them over others, and the colleges run zero risk of sending out too many offers.