It won't last. You need a good grade to find work after so handing out lower grades decreases applications next year.
On the plus side, high grade + long ago remains a signal.
I doubt that's the bottleneck. UCB's acceptance rate is not high (<5% for CS). They have way more people who want to get in -- qualified kids, too! -- than they can fit. They'd need to burn through that backlog before it started showing up as a signal.