Also, 500 words is not a long essay. And standardized tests and grades are a poor judge of talent.
Agreed on both points. I think what all this boils down to is that the key to getting better answers is to do away with the questions. More schools are making SAT scores optional because, while it makes for easy racking and stacking, it tells you very little about the applicant beyond "alble/unable to score well on a big test." In reality, most of the application items are little more than good/neutral/bad check boxes (insert generic off-topic D&D joke here if you must). Outside of the truly exceptional and the painfully unqualified, most applicants are largely indistinguishable when judged by the typical criteria.
And then there's the essay. This should be an opportunity for the applicant to fill in some of the gaps left by the application, but all too often it is filled with trite nonsense like the example essay. The alternative is the set of mini-essays, but I personally despise that sort of application (any school that required one of those types of applications was immediately crossed off my list). Judging from the comments here, people tend to strongly prefer one, the other, or something else entirely. Maybe there's some utility in using the format to narrow the focus to particular personality types, but I don't see how employing a rigid structure in this part of the application is any more useful than requiring SAT scores.
My own opinion is that all of this should be optional but encouraged, with no limitations or requirements. Applicants who don't include something aren't penalized, but those who do have the advantage of presenting a more complete picture of themselves to the admissions staff (and anyone who sends a thousand-page manuscript is automatically rejected, no matter how ornate the binding is). The minimum/maximum lengths and BS topics absolutely have to go. Giving examples of preferred topics is helpful, but any required elements will make the essay less about the applicant and more about the requirement. Opening this part up to more than just essays (while requiring that it be the applicant's own work) is probably ideal, but I can understand why an admissions office would want to avoid truckloads of abstract sculptures and creative uses of fecal matter.
Personally, it didn't take me long to realize that I could just take something that I wanted to write and fit that to the essay topics. Once you understand the purpose of the essay, it becomes a simple matter to come up with an answer without knowing the question. When I applied to college, I wrote one essay and sent it with each of my applications. Aside from the 500-word limit (mine is 1850 words), it fits the topic of the MIT essay in question (not perfectly, but it wouldn't take too much massaging to fix that). It didn't get me into Harvard or anything, but it served its purpose and didn't require any effort to be wasted on bullshitting.
(Padding to reach 500 words.)