So, I was involved with admissions in a selective graduate program. Not undergraduate but I saw some of the same issues arise. I have a lot of thoughts about this all.
The end result of a lot of this, my guess, is that schools will drop standardized tests as admission requirements. That's what happened at my institution.
Standardized tests are also biased. They are definitely biased toward individuals who are representative of the typical test-taking participant in background, who have more test-specific preparation beyond ability, and toward individuals who are more familiar and skilled with standardized test-taking in general. The purpose of standardized tests, nominally, is to select on aptitude, ability, or achievement, independent of the test, not to become the thing selected for. People seem to forget this. All the other things -- grades, experiences, and so forth -- are also biased in their own way, but in ways that counter the bias of tests. The reasons for having multiple criteria are so the different forms of bias sort of cancel each other out, or can be evaluated against one another.
Stepping back a bit, I have colleagues at institutions who heavily use standardized tests rotely, and they complain heavily about ending up with students who just want to be told the correct answer, without thinking independently or questioning material. That is, overly obsessed with grades, or missing the fact that established textbook information is often incorrect, or incomplete. This is the fear. Schools want you to be right in the "real world" even if it means getting a lower test score or grade. (Importantly, these colleagues are at institutions with low numbers of Asian applicants to begin with for other reasons, mostly geography.)
Having said that, there's definitely racism afoot. Interestingly to me, people seem to be assuming that this always takes the form of quotas or something, where the racism is in favor of blacks or hispanics, and against Asians. This might be true in many cases, but racism can operate simultaneously against both. I have had colleagues who have argued heavily against black-hispanic applicants because test scores were too low, and then against Asians with good test scores because of interview characteristics. What people might be missing here in this HN thread is that this racism was coming from persons advocating for use of standardized tests. At some level this can happen because typically there are more than enough applicants with high enough test scores, and because there are other reasonably objective criteria that are also legitimately important, so you have to use something other than the test to make decisions.
The net result of this all was to conclude that tests were problematic in both directions, that it underselected some people of disadvantaged backgrounds and overselected other people of other types of backgrounds. Not because of race quotas per se, but because of test bias. There were too many experiences of people with very good real-world qualifications in every other respect, but low test scores, or high test scores and every real-world indication of problems, even among individuals who were all white. The response to racism with regard to test selection was to just drop the test requirement, because in situations with racism, it was being used to exclude underprivileged individuals, and also not helping people who were experiencing other forms of racism. It was basically concluded the test was becoming a distraction and not functioning that well.