No it's not... there are many more job-types available for PhDs than academia, so tying it directly to how many that particular school could support isn't a goo

No it's not... there are many more job-types available for PhDs than academia, so tying it directly to how many that particular school could support isn't a good strategy. Is a school only to admit a graduate student when one of their tenured faculty is ready to retire? Sure there are more graduate students than jobs available, especially in academia, but it's not necessarily a good idea to tie admissions directly to something like that. It makes less sense in the sciences where graduate students are typically the ones that do the experiments that the PI is interested in and keep a lab running and funded (Post-docs usually have a little more independence in their projects). But, one thing that naturally limits the number of graduate students in the sciences is that those positions are usually funded. So, if a department wants to admit a student, they had better make sure that there is some way to pay for them. That naturally limits the number of graduate students that a program can handle at any one time.