Pretty much.
For whatever reason, prospective students and their parents put a lot of weight into the graduation rates when comparing schools. The implicit assumption is that the quality of the university dictates the success of the students. In fact, the opposite is true. Apparently it never occurred to anyone that some schools have a higher success rate because they attract a more successful student.
For a while it seemed as if Proenza was sort of burying his head into the sand on this topic (perhaps the allure of attracting minority students and...ahem...the federal funds that come with certain demographics was too appealing to pass up) but he seems to have seen the light(see recent undergrad admissions requirements upgrade). I'm sure recent changes to the state funding mechanism have been an impetus to that change.
At any rate,I'm of the seemingly radical opinion (at least around here) that a higher admissions standard is the sensible thing to do. If that means UA won't see Proenza's projected 40000 student enrollment within the next decade then so be it. Quality over quantity. Although UA is a public institution so it may be hard for the suits in Buchtel hall to pass up the 'rewards' which increased quantity brings.