Yes, any university understands that many (most?) of their students are simply there for a diploma that opens up opportunities, and the parts of an institution that view it as a business are going to want to maintain the value of that product.
But the faculty of a university isn't typically in it for the money--in most fields you can make more money in industry than in education. A lot of teachers just want their students to learn, whether their students want to learn or not. Faculty senates aren't powerless in steering an institution, and sometimes knowingly make unprofitable decisions--something a lot of HN can't imagine or understand. ;P
And a lot of students are there for that--in fact some of the most profitable students are. Do you think a Saudi prince need a diploma to open up opportunities? No--they're there because they, or someone in their family, values something else about the institution, be it knowledge, networking, etc.
But when push comes to shove, that's still the ideology that drives the universities as institutions. That's not a new phenomenon. I was in college 40 years ago, and I saw faculty members who were outstanding teachers get second-rate treatment compared to those whose classes were horrible, but who had the right connections to bring in the grants and promote the brand.
Why would a Saudi prince be a more profitable student? The only difference between him and most of the other students as far as money is concerned is that his family can afford to pay the grossly inflated tuition out of pocket instead of having to get financial aid. But the money is the same in either case as far as the university is concerned.