> I had a semester where I failed almost every class due to a life event
Sadly, that's exactly what the universities here (not US) seem to measure: your ability to cope with an unmanageable mess called life. They overload you with schoolwork and those who are either gifted enough or able to cope with it will graduate.
A "life event" sounds something like a death or major illness of a loved one, an unexpected loss of financial support, a health problem, car accident, or some other third-party issue external to one's schoolwork. Penalizing these people doesn't filter for those who can cope; it sorts for those whose "life events" happen to occur after they graduate.
It all makes more sense if you stop looking at it as a "system" and just look at how it empirically works. Nobody is optimizing for anything, not even their own self-interest. We're just doing what we're doing because that's what we do.
Sadly, that's exactly what the universities here (not US) seem to measure: your ability to cope with an unmanageable mess called life. They overload you with schoolwork and those who are either gifted enough or able to cope with it will graduate.