I have been really puzzled by this situation and haven't been able to stop thinking about it since last night. I spent a long time chatting with an LLM and reading articles published by community college instructors and university faculty in California, and looking for examples in other states, the research (in California and other contexts) that examine the related problems with remedial courses.
I've learned a lot, but the one example I want to raise is one I learned about how some other community colleges have addressed the same problem. In some states that where the solution wasn't mandated or constrained by legislation, schools replaced their conventional placement test and remedial courses track with repeatable, low-stakes testing. When you fail the test, it points out where you were weak and directs you to study material, and then you can study only the parts you struggled with and retake it as soon as you want, as many times as you want, for free. If you fail repeatedly you're offered a kind of integrated online course that is self-paced rather than a fixed semester length and has a really favorable class size (15 students, 2 instructors). It's sold as a service community colleges can buy into, and I really know nothing about it, so I don't want to name the vendor. I don't know if their particular tests are actually good, of if their streamlined course recapitulate any of the failings of conventional remedial courses.
But the general outline seems... pretty good, right? It isn't expensive for the students, it isn't a lengthy detour, and it doesn't work by lowering standards or potentially fraudulently promoting unprepared students (which I imagine adjunct professors at community colleges are systemically pressured to do at institutions where administrators care about their pass rates).
I'm not sure if "Come back as soon as you're ready, here's where you struggled, here's where to get extra support if you need it, all of this is free" should be considered fixing the remedial courses or bypassing them, but it seems doable and like it addresses the time, money, and stigmatization/discouragement problems with old-school remedial tracks.
Anyway I hope California can get more creative here and try to get serious about measuring success (i.e., actually do more testing of learning outcomes when they make changes like this, instead of just looking at course completion rates). It seems like a solvable problem.