Dunraven and Norwood schools are hardly in fashionable / expensive (relatively speaking) suburbs! And I would say that at both white families of British heritage are in the minority.
I know several families with kids at Kingsdale - it was on our list, too as the 3rd furthest away behind 2 more local schools. They are happy, it is a good comp. There are also other good comps in the area. I can only imagine that the hype and bumping up of applications is to provide evidence to the investment into its expansion - introducing a sixth form, expanding the intake in each year.
And it is a shrewd move. There is nothing like a whiff of competition to get the highly competitive middle class families in the area chasing a place, especially with a scholarship attached.
Also, until recently there has been a shortage of co-ed places in the area, so many many families closer to Harris Boys or Girls respectively or Sydenham Girls or Hilly Fields Boys would try for a lottery place at Kingsdale. And anyone who is not 100% happy with their own closest schools can try for a lottery place, so what's to lose?
Some Kingsdale students I know have moved to Charter or Dunraven for sixth form.
I can't really see why they can't do a random pick from the whole waiting list for every place - I am pretty sure it is done by computer rather than the Chair of Governors or a local celebrity like Jo Brand, perhaps, popping down to pick names out of a hat.
I'd still like to know the opinion of an admissions legal expert like @prh47bridge on their maintaining one numbered waiting list (for each category) rather than re-drawing the lottery each time.