We certainly aren’t a country of dunces, but on average our schools have plenty of room to improve.
The latest PISA results show the US ranked behind Poland and Latvia, among others.
http://www.oecd.org/pisa/keyfindings/pisa-2012-results-overview.pdf
Some common criticisms of the test or rebuttals to our results are addressed here:
http://www.edweek.org/ew/articles/2014/01/08/15hanushek.h33.html
There are quite a few international applicants as qualified, if not more so, than students on the cusp at many US schools.
We have millions of brilliant minds. The rest of the world has perhaps 10-20 million at the very least, many of whom want to study here in the US. It shouldn’t be all that surprising that American colleges accept quite a few more today than they did 20 years ago.