I suppose stanford does optimize for cheating, but this still seems excessive

I reviewed incoming applications during one Oxbridge academic application cycle, I raised some serious concerns, nobody listened, and therefore I refuse to take part of that any longer. Basically, lots of students are pretending to be disabled to enhance the chances of applications that would not be particularly outstanding, taking spots from truly disabled students.

All it takes is lack of principles, exaggerating a bit, and getting a letter from a doctor. Imagine you have poor eyesight requiring a substantial correction, but you can still drive. That's not a disability. Now, if you create a compelling story inflating how this had an adverse impact on your education and get support letters, you might successfully cheat the system. I have seen several such cases. The admissions system is not effectively dealing with this type of fraud.

Sadly, society also optimizes for cheating. Meritocracy is a myth.

In many ways Stanford is preparing students for the real world by encouraging cheating.

I use the word "cheating" like I use the word "hacking." The connotation can be either good or bad or contextually. You are defeating a system. The intent of the cheater/hacker is where we get into moral judgements. (This is a great sub-thread.)