The university's do not "set" cut-offs! At least it's definitely not supposed to happen.
The process works whereby the university says "we have 3000 places this year for B Arts & Sciences". Lets say only 2500 people apply. Then they are all given places, and the lowest UAI out of those candidates would be called the "cut-off", and the course is listed as having vacancies.
It's all based on supply and demand (quote stolen from a BOS forumer). If 4000 people with UAI's all over 90 apply for this course which only has 3000 places, then the cut-off will end up being in the 90's.
The university does not set a cut-off, the cut-off is a result of the offers process.
However! Sydney university may well have received applicants with UAI's below 78, but decided that, in the event of vacancies, 78 was the lowest UAI they were willing to accept, and they would rather have the course half-full than full of people below this level. Hence, do not take this as "the university doesn't value the course", because the university simply runs a course, supplies places, and in case of vacancies will set a very limit to which they will accept applicants. And of course this "bottom" limit would be low, they do want to fill their places after all.
Hope this eases some of the pain you're feeling. All that matters is that you're happy doing your course! Do not be pressured into thinking you must do a course with an entry level 0.05 below yours.
Peace