Basically social power and wealth is distributed in a top-down way based on which school you went to. "grades" don't actually mean anything they're just a social fiction created to justify why some people have greater shares of power/wealth/freedom than others.
Asian families, the pragmatic authoritarians they are, are very good at hacking this system of social sorting. The elite colleges know this. Elite colleges are n the business of creating and maintaining high status in the eyes of society. The highest status people are often not the best education-hackers. Therefore, the elite colleges don't sort solely or even primarily on the basis of grades. They want people who are going to rise to powerful, prominent, high status positions and they accurately recognize that hordes of Asian authoritarian parents are just hacking the system for their family's wealth.
They use racial profiling because it makes sense given their goals. Anyone who tells you it isn't racism is suffering from some kind of American myth of a post racial world.
Caltech is color blind because their goals are different. Caltech is for scientists and so they don't care what race you are. Yale is for leaders and good leaders usually don't get that way by being obedient violinists.