1) This development will have terrible effects on certain groups who tend to do well on the SATs (due to a high mean intelligence). Jews, in particular, are drastically overrepresented at elite colleges, partly due to their high scoring on the exam. When this test is removed, they will recede into the mass of other applicants.
2) Long term, this will damage elite universities (esp the Ivy League). In the old days, those schools were at the top due to the social status of their students and alums. Nowadays, their status derives from the fact that they get the smartest students (The Bell Curve shows a wonderful graph in which the perceived quality of a school smoothly increases with the school's mean student SAT score). Without an ability to determine which students actually ARE the smartest, the elite schools will not be able to "cherry pick". Over time, this will erode thier reputation.
3) This change will damage the perception that is held by most members of our society in regards to the legitimacy of existing social and ecomomic strata. Basically, most folks in America think that those who go to elite schools and get high-paying jobs do so because they have a combination of work ethic/natural talent (read: intelligence). Folks think that anyone who works hard and is blessed with natural talent will move into that upper strata. This belief is essential to the continuance of our social system (which has large amounts of inequality). When the faith that this strata is equally applied via objective intelligence measurement erodes (and is replaced by some politicized mechanism of deciding who moves up and who doesn't)....the faith in the system goes down the tubes.
Long term, this will continue to damage our nation's competitiveness, as Euros and Asians, despite their politics, are not following this insane path to ignorance.
The SAT is the single best predictor of freshman year success currently in use. The correlation is better than .8 (a phenomenal statistical correlation), which is almost as good as saying "...the better you SAT the better your first year grades." Libs and the education establishment have tried to bury this for years. The only reason they want to dump the SAT is to thin out the amount of whites at elite universities. There is no other reason.
My university is in California and was overwhelmingly white during the middle '80s (better than 90%). The administration was fit to be tied over their "lilly white" campus (their words, not mine). The average SAT for admitted students for the engineering programs was close to 1350 on the old scale. They changed the weighting of the SAT for admission during the 1990 admission cycle, and experienced a phenomenal change in the demographics of their freshmen. SATs of admittees went lower, while the scores of the first quartile of rejectees went sharply upward (actually higher than the admittees). Academic disqualifications skyrocketed, racial tension climbed, as did the crime rate. The general academic standard started to slide.
I will never forget when our campus newspaper ran with the lead story on Stanford's grade inflation, and how they reintroduced the "D" and "F." It made it very hard to compete with Stanford grads for graduate programs, when the lowest grade they could possibly achieve was a "C" and the campus average was closing in on 3.5, when Cal Poly had an average of 2.8. High School grades work in much the same way. My freshman room mate's school had almost a dozen grads with better than a 4.0 (large Mexican and black population), while my school had no one with a 4.0 (98% white).
There has to be some standard for comparison. My roomie had a 4.05 gpa with a 990 SAT, and I had a 3.7 gpa with a 1400 SAT (old scale). We both took the same exact test on the same exact day at the same exact time, but our grades were earned in entirely different circumstances. He was academically disqualified by the end of freshman year, and I graduated near the top of the heap.