I think college admissions people know what 17 years olds can’t see very well (and sometimes their parents in the throes of trying to get a kid launched forget as well) - one year between high school and college is a tiny blip in the course of an 80 year live. The kid has 60 years ahead of them – so what if they go to college with only 59 years ahead of them? And if they can use the gap year to mature, become a bit more interested and interesting (which colleges like), and gain a little perspective on what they want to do in their life, college LIKE that.
But as @doschicos said early in the thread, there is no guarantee that your admissions to a similar list of colleges would be any better in a year. If you aren’t happy with your admissions results this year, then a gap year can be a fine idea. But you probably want to retool your admissions list for next year, too, for schools that are more realistic for your stats if you strike out this year. I gave both my kids the options of taking a gap year if they wanted to, with the caveat that anything they did away from home had to be self supported (eg, au pair in a foreign country for a year would be an option). But I wasn’t going to pay anything significant for a gap year experience – they would have to figure that out if they weren’t going to be living at home and doing something productive from there. Neither took the option (not even the one that I thought would get the most benefit from another year of maturity before college). I actually felt strongly that having a year of less stress, more freedom, and exploration before starting college was a great once in a lifetime opportunity, so I would have been happy if they had taken me up on it.
One of my kids has a friend whose parent (doctor) paid for the kid to do a couple different exotic travel trips aimed at gap year kids. I think the parent didn’t know what to do – the kid didn’t like HS, and didn’t really want to go right to college. Parent agreed to a year of gap funding, and honestly could afford it (I couldn’t even if I wanted to). Kid came back, tried trade school and community college, has been doing restaurant work, and finally finished community college AA and transferred to the state flagship to work on a degree there. Running a couple years behind their HS peers who didn’t take a gap year, but seems like to finish a degree eventually. Parent seems okay with kid living at home as long as they are working and covering some of their own expenses and making degree progress.