Your first point seems paradoxical but I might be misunderstanding. When you said 'dons were jealously guarding their right to decide, on their own, who would get in', are you inferring that although the right to decide is owned by the dons, they are 'ordinary' so there is less selection pressure for people from powerful backgrounds?
Basically I got the impression that the Dons/profs would not like if the college master tapped them on the shoulder and said "Little Johnny's dad gave us some money, please let him into your tutorial group".
If you look at how admissions work, it seems reasonably fair: most courses have some sort of entrance test, and then a grilling by the don. There's not a lot of soft questions in those interviews: what's e, let's take the log of a negative number, what's magnetism. Not a lot of cultural fit or motivation questions.
There's also the fact that the dons seem to just have their own set of applicants to look at. My understanding of the US system is you have a whole pile of applicants from which to shape the class as a whole. At Oxford it seemed like your don has 10 applicants and chooses 2 or 3, and that's his class. The rest of the uni does the same and the incoming few thousand kids are just whatever the sum of those little decisions is.
