This is a great example of always making sure to check your sources.
That article is indeed from 2001, and both of the deans mentioned are no longer even deans at each of the schools. As far as construction is concerned, it is true that NYU reduced class sizes during that period due to massive rennovations. However, as of this school year, they completed construction and thus have accepted more students. The class size is actually now above 440. The admissions dean specifically told us that they are now able to admit more applicants due to the fact that the facilities have been increased to accommodate more students. So yes, class sizes were reduced due to construction and now have been brought back up since construction is finished. I would expect that the number accepted this year will be about the same as last year, and see no substantial reason why that would change.
It's kind of funny to me that people are so quick to question the motives behind every move each university makes. Seems to me from the students I've met here at NYU, we have enough to worry about without also caring about how or what Columbia is doing. As an applicant, perhaps, but once you decided where to go, it hardly matters anymore. I'm sure it's the same over there. If there's a rivalry, I sure don't feel it as a student here.