Bingo. Word is out that college is a chance game for the 'right' school and even when you get in, it's rigged. You simply cannot compete with China, India, or Malaysia for spots at Stanford or UCLA. Those kids and parents can just plain out work you. My wife went to UCLA for grad school. Her students could speak English better than her, and would just out wait the professors for points on tests. Every single little thing was an argument and you'd just tire out and give it to them eventually. The cheating was a real concern as well, as the other cultures didn't really have a sense of it being 'wrong', that it was just another arbitrary rule you had to jump through. You get caught? Then you didn't cheat well enough. Also, all those kids are then either ending up back in Asia or in a cheap H1B visa spot you can't afford a mortgage or kids on.
So, somewhat smart kids from Iowa will ask themselves: Why bother? I can't compete to get in, I can't compete when I am actually in there, and I can't compete when I get out. Forget this game, I'm taking my tiddly-winks and going home.
And that is where the tier-2 schools really shine. Vassar, Colorado School of Mines, the Claremonts, etc really can take those kids that aren't literally-cookie-cutter-perfect-snoflakes-drill-and-kill and make them really shine. Yeah, they won't be the CEO of Hundai or GE, but they will make a damn good Lt. Major, or a VP at 7-11, or a hell of a McDonald's franchise owner, or the best darn member of a school board that is always re-elected, or a real good child abuse prosecutor. You won't make billions, but you will make 3-4 million.
There really is a need here for B- students that deserve a good living. Getting rid of the darn SAT is a great way to attract them.