I think there are two kinds of scholarships, both vastly different.
There are those the school seeks out, perhaps they have a poor year in rowing, rugby or soccer (also they could be seeking to improve academically or in the arts). These boys are actively looked for and hand picked. They are then given free tuition to fill a gap and it is, to be honest, pretty sketchy.
2nd is when the scholarship holder/his parents actively seek out the school. They present their sons sporting/music/academic prowess (or a combo thereof) and rationalise it along with the backround they have and perhaps family links to the school. Their son, because of reasons listen above, is granted a scholarship. I know at the privet school I went to in Victoria never let a financially disadvantaged background deny the school a quality member, it's just people don't often ask for a free spot. I'm more then sure that many other schools do this.
Anyway, these types of scholarships are vastly different. If many terrific rugby player's family seek out a school as a developement platform but don't have the dollars, yet their son is a quality young man, why not allow him at the school?