I think it's good they use it as ONE factor when deciding which students to let into their school. But, it's also important to look at essays, GPA and reference letters so you can get a better insight on the person.
I think they should take the students overall average as well as the SAT results and as long as one of the 2 meet the requirements the student should be accepted...it's different in Canada we don't have SAT.
Yes they should, as there has to be given methods in which colleges and universities pick students. Each school ought to have its own standards and processes. You can find more on the same from this link http://www.admissiontoselectivecolleges.com/.