That's what bothers me the most about this. The reason this is even an issue in the first place is because universities are aren't adequately providing what the students want.
So you want to study, say, engineering.
First you have to apply and get admitted to the university, and many people aren't admitted. The acceptance rate I can find for UW is 54% in-state, 46% out of state.
Then the university tells you that if you want to study engineering, you have to study a lot of other non-engineering things it feels like you should study. All of which are pretty costly and time consuming.
You might have to take courses in things you already know, because there are few courses you can test out of and the universities limit how many credits it can bring over.
Then on top of this, the universities don't provide anywhere near enough adequate quality classes for students, which is the whole reason why there's this level of demand in the first place.
Not only do they not provide enough, they know they don't provide enough, so their response is since it's "really competitive" they need to be "really strict about making sure that no one had an edge over anyone else." It's not about making sure students needs are being met, even for classes that the university is forcing on them. It's about restricting students, so that they suffer a roughly equal amount from the university's failures.
The attitude of the universities seems to be that since they're the only game in town, students have to suffer through all of this. Imagine a system where students could take classes from anywhere they want, and then could get a degree just by passing assessments at the university. I imagine the number of people paying huge amounts of money for inadequate classes would plummet.