Taking in the students and letting them fail is more fair. But it's also unfair to decent students if the level of education is dropped to make more students pass.
- The SAT has been bastardized as a test and no longer effectively measures this stuff
- College admissions have deemphasized the SAT and other standardized tests of reading comprehension
- Elite college admissions is lousy with "consultants" who workshop students' essays to ensure they've got a better chance of admission
That being said, if you were going to find the kids who CAN read, you would probably find them at elite schools.
By the time you're graduating secondary school you should be able to demonstrate end-to-end ability in multiple subjects (in something like an AP or an A-Level), which should be a better proxy for doing well in university than something as handwavey as the SAT.