For me, it comes down to the purpose of the level of fitness you're demanding. There is job-specific fitness, such as that required by SEALs, EOD, Marine infantry, etc. I have no issue with any community establishing and enforcing such requirements.
Then there is fitness as in being in shape. There are all sorts of good reasons for military people to be fit and in shape, regardless of their specific jobs. Health, looking professional in a uniform, being prepared for unexpected eventualities, etc.
The question is how one measures that type of fitness. There is weight and body mass but that doesn't always work. My firstie was "overweight" with 7% body fat (and actually had to lose weight (muscle mass) to graduate).
Then there is testing. But what should we test? Currently, it's running (as default). However, some people are better swimmers than runners. Some people can run but are rocks in the water. So, is running the best measure of fitness? Yes, if you need people to be able to run (see above for job specific requirements). But if running isn't essential, maybe fitness can be demonstrated with a bike or swim. I would argue that a varsity swimmer or an elite cyclist is in the same "shape" as a varsity X-country runner, but each probably isn't nearly as strong in the other disciplines.
Now, mids know the current standards when they show up and when they sign the 2 for 7. But I really have to wonder whether (borrowing from another recent post), we want people leaving before 2 for 7 b/c they're afraid of failing the 1.5 mile run and having to pay back hundreds of thousands of dollars. If they're out of shape (failing multiple elements of the PRT, overweight, etc.), that's one thing. But what if they look great, can do sit-ups and plank and pushups -- and can even swim and bike -- but can't run well? Kick 'em out? Really? If you told me a varsity swimmer was being booted b/c s/he couldn't pass the run, I would have some serious questions. Of course, that wouldn't happen, would it?
For me, "lowering" standards means changing the lowest passing score so that people who failed in the past now pass. I agree that we need to think hard about doing that. Allowing people (legitimate) means of demonstrating cardiovascular fitness other than running may make sense. Changing who gets an excellent or good on the PRT is no different than academic grade inflation (which has clearly happened at USNA since I was a mid).
I'm not saying you have to complete an ironman, but our military should have at least a basic level of fitness. 
