Why, though? The cost is near zero and there is all kinds of positive publicity and the ability to promote that they are as much about education as they claim to be out of this. There's no downside.
You're probably right. Maybe 20% of these kids are (a) smart enough to get an advanced degree and (b) have the motivation to get one. The vast majority of these kids are doing good to just get a BA. But I'd make damn sure they had some academic requirements to keep the scholarship active such as a minimum number of hours/semester, minimum GPA and a maximum time to complete an advanced degree. Otherwise you'll have some professional students milking the system.