Harvard can do this because they're rich and they're Harvard. The SAT and ACT simply don't work well to predict good students. Harvard is going to run applicants through an insane gauntlet anyway, and they trust their admissions personnel to perform as well without the tests as with. In their case, the tests probably add more noise than signal, especially with applicant self-selection.

Other, worse universities, are not going to have the resources to significantly evaluate applicants at all, and still need those tests just to insure that students have minimal math and language skills.