I don't think that the Cal Grants program was ever designed to remove those people from the program. It was designed to make sure they didn't get an advantage. In other words, it was prevent universities from letting people who otherwise would not have made the grade in just because their parents made the grade.
Giving alumni's children an advantage isn't giving an advantage to "the smartest, most charismatic, most talented people" -- it's giving an advantage to the luckiest (the ones who happened to be born into it).
And the phrase "it would be ideal if those born into privilege could also clear the SAT" is such a strange one. OF COURSE rich people can "clear the SAT;" in fact, they get the advantage of MUCH better preparation, etc. So this is absolutely about giving an advantage to kids who could not qualify on their own.
To be clear: I don't think Stanford is doing this to keep poor people out (their scholarships have always been very generous). But I do think the administration probably done some basic calculation: they get more in donations from alumni who want legacy admissions for their progeny than they get from Cal Grants.
And Stanford has decided that accepting some kids who just don't make the grade is worth that economic advantage.
At some point, you have to conclude people don't actually care if they smash their phone based on how frequently they do it.
As I said, it's baffling.