For ever 100 applicants 3 seats are available. If you are "average" amongst the pool of applicants there are 46 better people than you that won't get in either.
Having elite universities scale up the number of seats available can be done. Grow the pie instead of having the current scarcity mindset. This would actually solve much of the current problems. There is no reason you cannot have the same or better quality of education with more students per university. The only reason this problem exists is that by limiting the number of seats you create artificial scarcity and thus higher value.
Average is quite a bit above the floor though, so that just makes it sound like he should have been accepted.