Earlier quoted context omitted.
I like how we're immediately jumping to "this is going to ruin the financial success of future graduates and thus hurt future fundraising." "Thing I like must be directly responsible for this other thing that happened later" is sad to see from someone from what's supposed to be one of our nation's best schools. Turning high school into middle school and college into high school, etc, in terms of adult supervision isn…
I think his point was more along the lines of "While you are at an elite school you should socialize and build your social network. That social network will become your starting professional network after school. Less opportunity for socialization will reduce the potential size of this network." Seems reasonable to me.
If the access to professional social network requires participation in the above, then I see why people see issue with that. In an ideal world, your professional future would not be dependent on your willingness to walk around naked or your enjoyment of raucous party. (Neither should damage your future, but should not be the key to access either.)
And in particular, I find it completely inconsistent with idea of meritocracy.