I think this is where an opportunity might lie. We don't need to make the big prestigious top-tier universities bigger - we need to make the lower-tier schools better and we need to build more of them in more states. The smaller schools need more interesting undergraduate programs - they need to be capable of producing more than just the typical liberal arts degrees. I also think industry has a part to play as well. They should be looking to the smaller state schools when hiring and helping those schools to improve their programs and produce more interns & graduates that can directly add value to their businesses.
And now back to our regularly scheduled program...
When I was looking at schools a few years back, this was something that I liked about the University of Wisconsin system. Though it's true that UW Madison is the big, 40K-student school for everything, many of the regional outposts of the university do some things very well, even better than Madison, for cheaper, especially if you're an undergraduate student.
UW La Crosse has a unique 5-year accelerated Master's in Software Engineering that no other UW school has, UW Platteville has an impressive mine engineering and mechanical engineering program, and UW Milwaukee has the best architecture and medical programs in the state and among the best in the region. All of these are significantly cheaper than UW Madison, and an out-of-state student can reasonably get their total costs under $20K a year at any of them. Those regional outposts of the university system also feed into graduate programs at Madison and Milwaukee, so you can save money on undergraduate (while receiving a better, more personal education than you would at Madison) and be ahead of the pack when you enter graduate school.
I didn't end up attending a school in the UW system because of some generous scholarship offers at universities with greater prestige (my scores were on the top edge of my graduating high school class), but Wisconsin's system is by far the best example I've seen of what you're talking about.
Edited by ssrock64 - 4/5/14 at 6:53am