The admission department's goal should be to create a student body that furthers the educational experience. This means admitting the smartest students, with diversity being a positive, not a negative. As a private institution, Wake has no obligation to cater towards North Carolina students and certainly shouldn't do so for the benefit of the athletics department. By admitting the best students, Wake is not only making the degrees of alumni worth more, but it is also helping ensure its future existence as smarter people are, more often than not, more successful people, and successful people, more often than not, give more money to their alma maters.
Quite frankly, it's absurd to suggest that Wake should not accept the best students out there.
And, for what its worth, the student body has increased significantly in size over recent years (about class of 2015 is probably about 200 people larger than class of 2011).