Actually it's the university presidents that are fine with this. The universities ARE the NCAA. Nothing happens without their assent.

Now, is this a good thing? It depends on who you are. For the athlete that is a marginal student, yes it's a good thing. Regardless of how rigorous their classes are they get 4 years living in a college setting, experiencing a different environment, likely growing as a person in some way due to these experiences. On top of it they get to play a sport that they love. They can benefit themselves academically as much or as little as they want to -- that's up to them.

For the university it can also be a good thing. The reality is that the major sports athletes are not representative of the student body as a whole nor of the academic measure of the school, i.e. the VT football program has no bearing on the national stature of the engineering programs at VT. The universities see athletics as marketing. Excelling on the national stage in collegiate athletics is promotional money spent to enhance the overall college reputation. So the schools don't mind. The only way the schools get hurt is 1) bad graduation rates, 2) athletes with criminal issues.

For the rest of the student body? As with the college, the academic side of things for athletes has no bearing on the general students day to day at the school nor on the status of their degree. Most don't interact with the athletes. The athletes participate in sports that are a diversion for many in the general population, so again it isn't a negative for them. At worst it's neutral.