What happens in other countries, where they only use grades/GPA, is that you start using more decimals - but then again, that's only useful when the size/population of "perfect" scores is low enough.
If you have 10000 students with a perfect 4.0, and 2000 spots, then it's obviously impossible to just use grades - so it kinda loses its function for selection.
Again, when you have so and so many perfect students, you need to use other features - otherwise you might as well draw random names out of a hat.
These schools (Ivy Leagues, Stanford, etc.) first and foremost want the students that are most likely to succeed at their schools. They know fully well that there are far more good students (on paper) than spots, but they also know that two 4.0 students are not alike. Some will fail, no mater how good they are in HS.
This is why MIT got rid of considering Subject II tests because even on top of already relatively wealthy select schools that offer AP classes only a select few of those offer classes that prep you for subject II test.
It's essentially exponentiating the amount of opportunities rich kids have to slice themselves within percents different from other rich kids at their school but overall entirely leaves behind students who weren't lucky enough to born in a neighborhood with a tax bracket that determines the schools funding.