This is all very well if the goal was to sift the wheat from the chaff - but modern western education is about passing as many fee paying students as possible, preferably with a passably enjoyable experience for the institutional kudos.
Western education passing as many fee paying students as possible seems to be very much a UK/US phenomenon but doesn't seem to be the case of European countries where the best schools are public and fees are very low (In France, private engineering schools rank lower)
At the other extreme are universities offering low quality courses that are definitely degree factories. They tend to have a strong vocational focus but nonetheless they are not effective in improving employability. In the last few decades we have expanded the university system and there are far more of these.
There is no clear cutoff and a lot of variation in between so its not a bifurcation but the quality vs factory difference is there.
Mostly done to get more degree holders which are seen as "more productive". Or at least higher paid...