I have never understood how Ivy League universities admit below average students purely on the basis of their parents' connections, while closing the door to much more deserving students who don't have influential backers. Since these universities are privately funded (alumni donations forming a sizeable portion, granting the donors even more influence), I guess they don't have to answer to anybody re their admission policies. But the problem is, when you hear that so-and-so is a Yale/Harvard alumnus, there is a lingering question in your mind whether he or she really deserved to be there.
Treating letters of recommendations as one of the key admission criteria (I think this applies only to post-graduate education; I could be wrong) is another related practice that I find irregular. Come to think of it, such letters could be the fig leaf used to justify such admissions.
Of course, we too have private colleges with management quotas here, but they do not enjoy the sort of fame and name recognition that a Yale or a Harvard commands.