When I was going through the ROTC scholarship application process, the recruiter asked me why I wasn't applying to the Academy. Told him first off, I'm going to Texas. And second, I wanted the college experience. Third, I would have plenty of military experience in the near future and didn't need to play the part in school any more than minimally required.
Personally, I saw zero added value in going to the Naval Academy over NROTC. I was just as well prepared as my Academy counterparts when I got to the fleet. During my career, I never observed a meaningful difference in quality between junior officers coming from the Academy and those coming from other accession sources - and that includes the ones from aggy.
If Cruz' plan is simply to help funnel folks into the ROTC program if they don't make it into the Academy, that seems reasonable. If it's just to funnel folks into the corps, well that's just about the dumbest thing I've ever heard.