To be clear, I am saying standardized tests (SAT and ACT) are useful for admission decision purposes today where the
average high school graduate who applies to a college has a 3.5-4.0 GPA on a 4.0 scale. I am also being rather specific in saying that limited-seat institutions or heavily over-subscribed schools where the number of applicants greatly exceed the number of enrollment spots need some way of filtering applicants.
A thing that I feel is VERY true is that most "highly selective" colleges and universities probably get a relatively small percentage of "instant admit" applicants and a much larger number of "probably will be successful here" applicants. A higher standardized test score (ignoring some nuance here) is a useful tool for entering the admissions lottery in that second group. It isn't all there is - I see high school grads with good standardized test scores, the default high GPA, and not much or any interesting things otherwise struggle to gain admission at over-subscribed schools.
Switching to actual college coursework, when I have taught undergrad students, I use demanding individual projects (evaluated by oral presentation, demo, and questioning) as a significant part of the course. It mostly doesn't scale as an approach but my (biased) feeling is that for the "middle 50%" of students, it is a valuable and worthwhile effort.
All of this gets really murky and nuanced depending on what your real goals are. Those goals are often quite different depending on perspective.