Yes, there are charitable ways.

You make an institution stronger (in fundraising, in love for the institution, in traditions, etc) by creating multigenerational relationships. When you're asked for money, it may be "eh, whatever it was my college" or it could be "Yes-- it's where my grandpa, pop, and I all went."

But there's a lot of negative consequences, too.

His comments more broadly make no sense to me.

“Over time, the quality of the applicant pool increased to the point where we really didn’t have [give legacies a boost]” - how does that work? If the applicant pool gets better, then if anything privileged groups need a stronger boost.

"Steidel said the tipping point came perhaps three or four years ago as standardized testing became optional at many institutions, including Carnegie Mellon" - is this supposed to mean that they can now boost preferred groups more easily because they don't have to overcome the testing differential, so they actually might have stronger legacy preferences than before, but better hidden?

Status quo, maybe, not not explicitly bigoted. Building a culture through generations, a sense of loyalty to an institution and a lifelong interest in seeing that institution flourish (and be funded) is a reasonable goal of a University.

I mean he's speaking about the past - so he's saying perhaps sometime in the past it was maybe needed, but he's saying that it's not needed anymore.

It's just a way to not have to specifically say something negative about the college, even if it's about the college's past. He's not preserving bigotry, he's just trying to not tarnish the brand.