New allocation process

I've been reading the new college allocation process and it appears to say that if you're not lucky enough to be allocated your first choice it is then completely random - so you could apply for a small, fully catered traditional Bailey college close to your lectures and get a large, self catered non-traditional Hill college with a long walk? This seems senseless so am I reading it wrong?

No you are not reading it wrong, and many people will agree it is senseless. The previous system, though was basically the better colleges (Castle, Hatfield, Chad's, John's) got to pick the best applicants (which usually meant public school educated, etc).

Out of curiosity, what make Castle, Hatfield, Chad's and John's 'better'?

Better funding opportunities (grants to go travelling, etc), more graduates in the City and other professions, convenient location, perception of being more "elite".

So, is/was it corrupt?

No...
Absolutely confused as to how a college could even be corrupt.

Do you mean "how?" or "why?".

"How?" is fairly straightforward and "Why?" is funding. The universities/colleges have been squeezed for cash for many years.