@EPallazzo Don Bishop, Notre Dame’s admissions director has said consistently that of the 40% of admitted students who choose not to attend ND, half of them attend ND peer schools and half attend their state flagship (which is lower cost, often excellent programs and sometimes an Honors College). So this is a pretty common dilemna, and one where there can be good choices either way. To some extent, it may depend on what you want to study and how you value the non-academic experience of each choice. And which state flagship you might be considering.
@threebeans Tulane is an excellent school and, while private, does fall into the category of being a financially attractive option to Notre Dame - though I would hesitate to call it a peer school for a variety of reasons. Tulane gives out a lot of merit aid for a reason - to attract excellent students who might otherwise enroll elsewhere and, in doing so, improving their student body. Having said that, it sounds completely like Tulane was the right school for your son and Notre Dame would not have been a good fit. So congratulations on ending up at the right school for him … and at a lower cost!
There is no one right answer to these things.