I agree that much of their use of "holistic" factors is simple discrimination and should be illegal, but considering other non-academic factors (arguably including character) seems reasonable, if not necessary, given the intent of these schools to build future leaders in various fields.

Quantitative measures can only give you so much information about a student. GPA is questionably useful past a point, where it starts to have more to do with grade inflation and gaming the system than differences in hard work or ability.

That leaves the SAT, which is far more of a level playing field than things like extracurriculars or "personal statements" that also end up reflecting your social class and ability to play the admissions game more than ability. Yet admitting students based solely on a single standardized test seems to disincentivize working hard at other pursuits that may actually bring more to the classroom than slightly higher test scores.