There's a story to write about how a relentless focus on academic performance starves out countercultural values, and probably another to write about how dispersing a 15% increase in failure-to-graduate-rate just hides the problem numerically.
But not as much of a story to write about intrigue and malfeasance at MIT.
If all that is true, my major critique would be that MIT themselves seemed unable to be adults about the whole thing. They should have just set a deadline and a specific performance metric, with a clear up-front warning that missing that metric would mean closing the dorm. No interviews, no notes to parents, no "cancelling the steer roast".