The policy looks like it's only for parties held by student organizations [1], not all parties held by its students, which makes the whole thing more silly than dystopian.
> I'm surprised they allow alcohol at student organization events, period
According to the link above, "student organizations" also includes fraternities/sororities and athletic teams. Never heard of fraternities/sororities not being allowed to have alcohol at their parties before, outside of schools with a religious lean (e.g., BYU) or edge cases. I didn't go to college that long ago either, been barely 6 years since I graduated.
The only relevant thing I remember we had was a "dry week", iirc during the first week of any given semester. During "dry week", fraternities/sororities weren't allowed to have alcohol at their events, period. Which made sense, because it was also the rush week, and the school didn't want fraternities/sororities to entice students with alcohol during their recruitment week.
God, now I'm thinking about how much better our fundraisers would have been if we could have sold drink tickets, for the organizations I was involved in. And how much more I'd have cared about fundraising if we could have diverted some of the proceeds to buy ourselves alcohol "for official functions", LOL.
[1] https://vaden.stanford.edu/student-party-policy-guidelines