Also, "businesses" have the right to pick their customers (in compliance with laws like fair housing).

I don't have a strong preference for/against legacy admissions, but I think it makes no sense that saying "we can admit only people of religion X" is ok but its wrong to say "we can admit people preferentially who have a family connection". Same with affirmative action vs race-based admissions.

There are so many sticky issues with the legality and meritocracy of admissions, that targeting a few rich kids seems like the wrong battle.