That's not the way it works.  Universities have their attendance regulated by governments, because governments provide subsidies.  International students are a profit centre that allows more money to be spent on other non-regulated things (wages, admin positions, sports, etc.), but not on admitting more domestic students.  

I can't speak about the quality of domestic students who can't get in, but I can speak from experience that the quality of many international students is weak.  They will get C- or D, then plead for a higher mark because they are international students who pay so much and need a higher GPA to remain in the program.