I have been a NYer my whole life and have yet to get that Greenwich Village/ Soho apartment.
So yes, many kids will eventually come and live in the city after graduation--but that does not mean they will ever have the opportunity to afford NYU's location.
D has lived for 3 years in Broome Street. She is surrounded by some million dollar condos. Her dorm is a converted apartment house that NYU has done up by improving the lobby since she has been there. I am not exagerrating when I say I would move into her dorm in a second as my primary housing if I could exchange it for my suburban Long Island house.
D stuck with NYU housing all four years. She has plenty of time to live in Astoria, Brooklyn or way up-town. The chance to live in a prime Village or Soho/Nolita location may be once in a lifetime.