There's a lot of complexity and nuance around why the US immigration laws are the way they are. There are a lot of people that want to get into the US. A lot. I cannot emphasize that enough. The process has a lot of issues, but you have to understand why it got that way. The US's goal is to ensure that anybody who garners entry to live and work in the US is a contributing member of society. The three ways it does that is that (a) you have family here that are presumably productive members of society, (b) you have a set of skills that makes you a valuable asset to the US, or (c) you have a ton of money and can create jobs in the US. If you have only some money and average skills, you're not nearly as valuable as if you have either (b) or (c). Since the US has an incredible number of applicants, it only selects the best they can.
You wouldn't find it insane if colleges or employers made the same decisions. The decision of his visa isn't made in a vacuum--it's made with regard to everybody else who applied for visas, too. And that's a lot of people.
The three ways it does that is that ... (b) you have a set of skills that makes you a valuable asset to the US ... You wouldn't find it insane if colleges or employers made the same decisions.
The problem is that there's a major disconnect with what the comfortable middle and upper-class people who make decisions about the immigration system think of as a "valuable asset to society" and the actual economic incentives for most people who want to immigrate to the United States. To use your corporate analogy, it's as if the hiring committee of a major corporation decided that there were so many applicants for jobs that everyone the company would hire should have the same skills and credentials that the people on the hiring committee have -- master's degrees and continuing education credits -- even though what the company needs to hire is janitors and security guards.
You don't think that people who come here illegally (or, best case scenario, who come here under agricultural visas that give them temporary residence and no stake in the country) to work in the fields or construction are contributing anything? Well, enjoy it when your food doubles in price, then. Or, more likely, enjoy your food staying the same price but the people who grew it don't have any labor protection laws or real roots in this country.
My point is not that we should just open the borders willy-nilly. But we need to have some kind of process for people who want to live here that doesn't result in decades of limbo, and doesn't cost tens of thousands of dollars to someone who's going to take up a minimum-wage agricultural job. And the process should help them become Americans. You know, like the process did for most of this country's history up until the 1930s or. That process did all right, as near as I can tell.
To clarify, I was stating the reasons the immigration policy in the US is the way it is. It's not insane. That doesn't mean it's devoid of unintended consequences, inefficiencies, and issues, though. Immigration is a very hard problem to solve for, especially given the heated emotional discourse about it on a political stage.
The process up until the 1930s didn't do all right--you're being naive in your nostalgia. It created an entire underclass, gave rise to ghettos, and forced people to give up their names in order to take more anglicized names. Moreover, there was a huge strain on infrastructure with the influx of poor Southeastern Europeans immigrating (mixed in with an incredible dose of racism and xenophobia). Wikipedia has a good summary of the laws and why they were passed [1].
There are a lot of problems with the immigration policy, and there are a lot of reasons that it's the way it is. My point is that this particular case of a guy being denied a visa could hardly be thought of as insane. Unfortunate for him, yes. Insane, no.
You wouldn't find it insane if colleges or employers made the same decisions. The decision of his visa isn't made in a vacuum--it's made with regard to everybody else who applied for visas, too. And that's a lot of people.