There are probably more efficient ways to build useful skills and learn material than paying for an elite education. Prestige is much harder to manufacture. YC is 10 years old (i think?) and has managed to do this, impressively.
But a lot of people, such as Harvard admissions, do pretend that attending Harvard has such benefits.
In contrast, no one at Harvard is pretending that they couldn't afford to enroll ten times as many students.
Put another way, Thiel fundamentally doesn't fund most people because most people are bad investments. Harvard admissions isn't claiming that it won't admit you because you're a bad investment and would devalue their brand. They're claiming that, if you were admitted, the experience of attending Harvard would increase your personal quality, but they nevertheless won't admit you for undisclosed reasons.