>Having students struggle for two years in a program they're going to fail out of is terrible.

Putting a body every a seat for those profitable 500-person lectures taught by an adjunct and graded by TAs who are all paid peanuts and then having them wash out before those expensive 50-person high level classes and esoteric electives taught by tenured profs and accompanied by lots of expensive lab time is great for the university's bottom line though.