See, I disagree about this point. I think that it is beneficial for the schools to do rolling admissions because it gives an advantage to those who show initiative who may have been overlooked otherwise.
From a purely economics standpoint, you want to maximize the qualities of your student (not just scores but initituativeiveiative). Many students who show initiative may not have other things going on like work or other things. Maybe they have time on their hands because they live at home and don't work and don't do extracurriculars. I'm not claiming that to be the case, but it is a theoretical possibility.
I think I may have made it appear as if I support one method and not the other. I think both have their strengths and weaknesses.
Imagine a thought experiment where every school had a deadline system. It isnt much different from what would happen in an oil cartel system. Eventually, one school, probably one of the lower schools would move to a rolling system because they would feel they can steal motivated students and these motivated students would still exhibit other good qualities like good scores.
Also, look at the election primaries system. Small states go first to give unknown candidates a chance to liven the debates. It also allows for the possibility of an unentrenched person to become POTUS. You had Huckabee and Romney do well in small states and Howard Dean did well against John Kerry. Obama did very well during those first few primaries and Clinton won the larger later states with Obama picking up some other large states as a result of those earlier wins.
I think in the end, the rolling admissions system incorporates many of the qualities of the deadline system. But the deadline system only works for the most prestigious school. It is possible for a deadline system to also incorporate rolling admissions qualities as well. Imagine if UC Berkeley gave a point system to when an application was submitted but did not disqualify anyone until the deadline. You'd still have a deadline system but one that rewarded initiative. Is it also possible that grades show more initiative than just applying early?
From the viewpoint of students, I think rolling is better. From the viewpoint of the school, I think it has a lot to do with the history of the school, the prestige of the school, and the current standing of the school. Imagine a school that opens in 2009 compared to one that opens in 1865. There's no way students will forgo one school to wait for the 2009 school's decision.
UC Berkeley will always have top billing since students are willing to wait for its decision.
Also, to the above poster, we use two digits after the decimal. I know you Canadians have big laughs making fun of us, but we Americans are perfectly capable of working with two digits after the decimal. : )