That's correct: anything that makes a college desirable vis-a-vis its competitors will factor in here. We don't attempt to control for that (that's, currently, intentional).
Avery, Glickman, Hoxby, and Metrick do control for that, as their goal is to use this to get an isolated notion of "best". For now, I prefer to answer the holistic question of, "Which schools do students prefer?"
If we get to a future in which some schools are paying students admitted to Harvard $100k to attend their institution just so they can rank at the top of the Parchment rankings, maybe we'd want to reconsider.
Harvard already gives financial aid to all of its lower-class and most of its middle-class students ... and they define middle class as family income in the $150k range, if I remember right. I don't think merit scholarships are really going to make anyone else directly comparable.
Of course, Harvard is rather unusual in this regard. I think only Princeton and a tiny handful of others have a similarly generous policy.
