Windows Preinstallation Environment ( win PE)

I was Studying about Windows Preinstallation Environment bootable USB and CD,When we boot through WinPE USB or CD, WinPE logs us as NT Authority /SYSTEM and Clearly We can Tamper With System files, setting the integrity Level of file to System or setting its integrity level to very Low enabling us to delete it and further it provides an easy backdoor into system enabling us to change Admin password,Why it is allowed by Microsoft?

I also know that when we insert windows Installation disk, The setup is run by WinPE as NT AUthority /SYSTEM, which can easily be used by kids to change windows password, Why it gives system privilege ? Is it necessary for Setup to Always run with SYSTEM privileges?