Except that it doesn’t.
@PurpleTitan said it well - some schools may in fact be doing an excellent job, despite having low graduation rates. If CSU-LA had a 95% 4 or 6 year graduation rate, one might question the quality of the academics. A low graduation rate is not necessarily a bad thing… but it is important to find out the reason(s) for those low rates.
Imperfect data is one thing, but graduation rate data are missing critical context. Its a superficial metric at best… like acceptance rate.