I am a Yalie (first generation, and on scholarship, though). I graduated in '92.
Yale, and most (perhaps all) of the private colleges and universities do make allowances for legacies. There is some good reason for this as it encourages alumni donations toward the endowment. The endowment is no laughing matter as both Yale and Harvard are using theirs to allow ALL students admitted to afford to attend. (My initial scholarship covered almost 70% until I won a grant from United Parcel Service that reduced the Yale grant to about 50% of tuition, room, and board.)
The positive side of all this is that the legacies allow the merit entries to attend. Also, I met quite a few legacies during my time there, and almost all of them certainly belonged. There were exceptions, though. I'm fairly certain that W was one of them in his day.
