Is a university really an appropriate place to send someone who couldn't keep up with high school coursework, whatever the reason, in the first place? At the very least, wouldn't we need some kind of preparatory education in between? There may be exceptions but I think it'd be hard for universities to evaluate if they are academically qualified.

As an aside, I know of several states that have similar programs - I'd thought that in many states, so long as you scored sufficiently high on the SAT or ACT, you were eligible to automatically get a partial (if lower) or full (if higher) scholarship to in-state public institutions.