We had remedial classes at my university, with the same test-score-based selection system. Everyone had to take two English classes: ENG 101 and ENG 102.

Students with very low SAT/ACT scores in reading/writing needed to take ENG 50-something before moving on to 101 and 102. Students with high test scores could take an Honors version of ENG 101 that also fulfilled the requirements for 102 (so they would only need to take one class).

The problem was that the overall bell curve was so low. The students in remedial courses tended to be extremely low performers - learning disabilities, serious issues at home, or older adults who hadn't been in an academic environment in decades. Those students' writing would have basic grammatical and structural issues leading to unreadability, and ENG 50 was focused on teaching them how to form a sentence or techniques to memorize spelling. There were some downright heroic ENG 50 professors, but the students who made it into ENG 101 had passed a very low bar.

I don't know if the standardized tests have become easier over time. I took the ACT a couple times in 2014 and 2015 but I don't really remember it.

I forgot to mention in my original comment - I graduated in 2020.