@red
In America, it's very different. It's generally expected that everyone go to college. I don't agree with this mentality, but that's the way it is. So, our Universities are already crowded with people that shouldn't be there.
I understand what you're saying about foreigners in college though. This is especially noticeable EE, which is popular in Asian and India. Universities seem to pick a wide range of students, from mediocre to brilliant. Additionally, they often have a hard time communicating because English isn't their first, or even second language. That isn't to say that I could do a better job learning mandarin, but I didn't go oversees to study, either.
I don't know if this affects US acceptance rates, as Engineering departments tend to be small to begin with. Also, they don't really take US jobs, because Defense Contractors are a large employer of EEs.
Overall, I think diversification is good. I don't think the quality of student is much different if they're from the US or oversees. Plus, as a white male, I'm a minority in the department, which is pretty amazing : )