I'll state the obvious up-front ... I do not envy anyone responsible for college admissions in an increasingly complicated world. With our population outpacing our top colleges' capacity, it is increasingly difficult to make the optimal admissions.
That being said, I think from the university's perspective, the goal should be from an elite university's perspective:
Admitting the absolute best possible caliber of students that can succeed, i.e. graduate and transition to a successful career that will bring prestige and future donations to the university
To a lesser degree, the universities do have an interest in admitting some students of wealthy alumni purely for the financial benefits - while it would suck I would not fault anyone for admitting Red McCombs' grandkids ahead of mine ... I'm never going to be able to endow a school; at least there is some tangible value to this preference as opposed to other artificial criteria
With all the advanced analytics available, there should be a reasonably reliable way to predict success and use those information to support admission decisions. It is complicated as you have to prevent admitting a bunch of kids who do nothing but study and have superior book smarts but lack the basic IQ / EQ to be successful in the real world. That leads to graduating a bunch of helpless robots who will never make mid-level management.
Similarly, you have to avoid admitting a bunch of poor kids that tried hard that have no reasonable chance of succeeding in a rigorous, competitive environment. That leads to a bunch of first- and second-year dropouts as well as wasted resources on the university's part ( or more lowering of standards) and life-derailing discouragement for the students. Said another way, a lot of these poor kids would ultimately be exponentially better off at a "non-elite" university where they can thrive and likely will be much better off long-term than being artificially admitted to an elite university, and the university would be better off for not having to spend extra resources helping these students cut it or artificially passing them only to set them up for career disappointment.
All that bloviating beside, not sure there is a better system than the one we had been using:
Grades to judge against local peers
Standardized tests to judge against national peers
Consideration for other factors such as leadership, extra-curriculars, socio-economic, environmental, etc.
Probably not perfect but not sure there is a better, specific alternative.