It's not "selective", at least not in the way you're implying. If you have average grades, almost all universities will accept you for the vast majority of degrees.

Also, fewer Germans have tertiary education than Americans because

1: Germany is widely known and praised for its professional education system so tertiary educatiom simply isn't necessary in many circumstances, and

2: Germany has a three-tier highschool education system (it depends on the state, but that's how it usually works), and only graduating from the "top" one allows you to attend a university. Many people simply don't bother with the top tier and finish high school after 10th grade and get a job while still attending a professional school (point 1).