Does the higher acceptance rate, compared to 17.3% from last year, indicate that the school is losing prestige?
Does it mean that USC is finally more prestigious than UCLA? 
http://dailybruin.com/2016/07/06/ucla-sees-increase-in-admissions-rate-for-fall-2016/
Here is the first sentence from your link:
“UCLA admitted roughly 1,500 more freshmen and 300 more transfer students for the 2016-2017 academic year than it did last year.”
The UCs have decided to accept significantly more students to get more students through the UC system.
Also, prestige has nothing to do with the admit rate, let alone for undergraduates. Private schools are always going to have a relatively limited and constant number of available seats and thus declining admit rates when Q of applications are increasing. At the UCs, the declining admit rates have actually been a concern about the long-term impacts on the UC system.