I do think that, yes you have to allow for inflation when you give kids a set dollar amount, especially if there’s pretty decent gap between kids. Also, if he family situation has changed, that dollar amount will change.
I don’t know that incentivizing (either a spelling error, or that’s not really a word…hmm) a lower cost encourages students to make poor choices (obviously, since I did it, lol) wrt to the quality of their education. We’ve heard it, and I very recently watched it play out with my own kids…it’s not where you go to school but what opportunities you take advantage of to build a resume. And that start without loans, and maybe a vehicle you don’t have to purchase with your first income or the promise of a paid for deposit/first month/last month rent in an expensive new city allows the newly minted adult some more freedom. Life is always about choices, and many of those choices have a financial component.