education is not a scarce goods - why not accept _all_ candidates that are good enough? The cost of educating one more student is marginal, and if there's a large enough number, economies of scale can kick in as well.
Education itself is not, but going to a top college is not the same as getting an education. If Bryan Caplan's idea of college being mostly about signaling[0] is true, then top colleges can't scale. They are an exclusive club and a lot of the benefits of top colleges come from being exclusive. Opening it up to more people reduces these benefits for the students.
[0] https://www.latimes.com/opinion/op-ed/la-oe-caplan-education...
which is something i feel is a bad outcome for society in general, even if this is good for those individuals.
The cost of marking one more essay and giving comprehensive feedback is more significant, even if there is a comprehensive rubric to hand it off to an assistant.
The cost of running one more seminar/tutorial group for every 10 extra students is significant. A degree based on lectures alone, without giving all students the opportunity to ask questions, is less valuable.
The cost of courses that involve more consumables (chemistry, biology) or more face-to-face interaction (languages) is significant per student.
Economies of scale might work in the first term, where the the purpose is to get everyone up to a certain common (and quite low) level. Someone with only a first degree in the subject might be capable of teaching that. In later years, you can't all be taught by a world-class expert in the field.
The cost of physically expanding a university is significant. It can also be very difficult. I once had a term when I had a 15-20 minute walk between adjacent classes, because the nearest place the university could expand into was an old school about a mile away.