Students have never been able to borrow more than the current limits for undergrad. In fact, they could only borrow $2,625/year in the late 80’s … tuition was much lower, but not that low at many schools. It has been a struggle for the dependent student to pay for college on his/her own for many years (if it ever really was “easy” - I know that I chose a co-op school in the 70’s expressly because I couldn’t afford other 4 year sleep-away schools on my own).
The truth is that there is no money tree, and the limited amount of federal aid must be divvied up on as equitable a basis as possible. No formula will be perfect - some will get the shaft (that family earning a few extra dollars that puts them out of Pell range may lose out on Pell & institutional aid they may have received had they earned a bit less), and some will hit the jackpot (the family with the business that loses money on paper who gets a Pell grant but can afford to live in a big house on a lake). The system has to ignore the outliers to try to help the most and the most needy.
And because there is only a limited amount of aid to go around, the family needs to be expected to assist. They have every right to choose not to do so, of course - but at least they have that choice. I worked at a large urban university with students from families that would have loved to have had the option of choosing whether or not to assist their child with college costs … but they didn’t even have enough to afford adequate food and housing.