The pie can get bigger or smaller. When the pie gets smaller, or is widely seen as getting smaller even if it is not, then there could be more incentive to compete, sometimes in a more “cutthroat” manner.
While it is true that there are plenty of unwanted pie pieces for the taking in the college admissions pie, it does look like there is an increasing tendency for applicants and parents to feel that only the more selective colleges are desirable (i.e. increasing “elite or bust” mentality, perhaps driven by perceptions of the overall economy). Such a perception, regardless of whether or not it is true, can increase the level of competition in what people think of as a zero sum game. Yes, it is their choice to restrict themselves to a zero sum subset of the game, but have you seen students striving for USC and UCLA (with realistic chance of admission) being happy to attend CSULA (or SFSU or UCM or UCR etc.) as their backup?