Are colleges reducing admissions standards to compensate for this? If anything, it sounds like admissions are vastly more competitive today than when I applied 20 years ago because students are more capable.
Admission score is a bad metric for passing university. Raising it will proportionally push out both the good and the bad. The problems outlined in the article are amplified in higher education, where students have to self-regulate their work, as opposed to lower levels, where you're more "forced."
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.
I doubt that the SATs were ever that effective at screening this sort of thing, at least for the past several decades. They're an aptitude test.
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.
SAT scores track pretty damn well with college success. Thats why schools are quietly reintroducing them as part of admissions since the "no SAT" policy fucked up kids who weren't cutting it.
In the absence of a better standardised test, I don't doubt it. However, I really don't think that the SAT does a good job of testing the kind of longer-form literacy that the OP is talking about. I showed the SAT English component to a British A-level English teacher a few weeks ago, and after reading a dozen questions he was red with rage, shouting about how idiotic it was to ask such asinine questions under such a heavy time pressure.
I guess I sorta can see what you're talking about, but from what I remember, the English section was easy BECAUSE it was so asinine. It was generally obvious how the question was guiding you to the solution.
The top schools can compete for the best students, but below that, not so much, just due to basic demographics--the number of high school grads is dropping.