Did any of that work actually matter? Probably not, but the parents felt strongly enough about it to spend hours writing 4th grade reports on Gettysburg or the Cherokee Indian tribe.
With parents willing to go that far, I don't think its surprising that they're shelling out so much money for admissions editors or are writing the essays for their children.
Really, though, I think its just symbolic of how far the American education system has strayed from its imagined mandate to educate. Children don't learn how to write or research when they are thusly coddled, and they don't learn how to deal with new and challenging situations when their parents go along for their first job interviews and browbeat the interviewers.
I think that these misguided parents are elongating childhood in a society where childhood already lasts longer than it ever has before, and are stunting their children in their efforts to give them a foothold above their peers. These parents won't be thwarted by reason, and will find some other mechanism to 'help' their kids advance. I don't think trying to neutralize them will ever be a good investment of one's time.