The discussed colleges are non-profit organizations. They actually spend far more the tuition revenue because of their extraordinarily high endowments. The colleges that have the highest endowment per student tends to be the ones with highest sticker price and most generous financial aid for non-wealthy students.
This is not a coincidence. I believe the original start involves Congress pressuring super high endowment colleges to spend a larger portion of their endowment. Some started dramatically increasing both sticker price and financial aid. Students with low income paid nothing, students with middle income paid similar/less than publics, and students with very high income paid the inflated sticker price.
The average (after FA) tuition + room + board + … per student received by the college was the same, so financials worked. The colleges were spending a larger portion of endowment on the increased FA, so Congress reduced some pressure. Free for low income and no tuition for middle income had good optics and was popular with the public, so marketing was happy. The only negative was for the very high income families who pay sticker price that is increasing faster than inflation; and there has been no shortage of wealthy families who would gladly pay near $100k/year for Ivy+ type colleges. If anything popularity among wealthy families has increased more than among other groups as sticker price has increased, sort of like a Veblan good.