As far as starting or expanding a university goes, one may have to make a choice between serving a larger number of students at a lower cost, or serving a smaller number of students at a higher cost. A lower cost school may bear more of a resemblance to a commuter school or community college in terms of social scene – i.e. it offers just the education and bare minimum support services (e.g. transcripts, registration, etc.) in order to minimize bureaucratic overhead. To serve large numbers of students, it may need to offer a relatively limited number of popular majors (rare majors like linguistics and nuclear engineering may not be cost effective to offer to a number of students that can be counted on one hand), and allow class sizes to get large (especially in common frosh/soph level courses). Facilities would be enough to get the job done, but no more. Research activity would have to be self-sustaining in terms of bringing in enough grant money to pay for itself. But would such a “no frills” school be seen as “desirable” by students?
The kind of school that many students consider “desirable”, with the full residential college experience, ample student services, small class sizes, research activity, and top end facilities, would be a higher cost school.