Ha, I have been blathering on so much in this thread I can barely follow myself. 
I think you overestimate how much it would cost to throw some real incentives out there. Can you guess how much it would cost Illinois to give every single incoming domestic OOS student in-state tuition for next year’s incoming class?
It is a rounding error compared to their endowment. And you wouldn’t give it to everyone. There is no real need to do so for the Engineering and Business schools, which make up the vast majority of OOS students and are already well regarded enough to attract a diverse student body.
To make a real change it would be expensive, and cut into the endowment, but we are talking $100 million over many years, not $1 billion (I would go the full Honors College route and spend $250 million, but I have a backbone). Like I said, it won’t be easy or cheap, but go big or go home, and you don’t need an $8 billion endowment to make it happen.
With all due respect to schools like Indiana, Purdue, Wisconsin, Ohio State, etc. Illinois should not be considered a direct peer. It should certainly not be losing any more than a token number of cross-admits. If you look at Illinois ex-Engineering school, it would be ranked far below these other flagships. That’s just incredibly embarrassing for a state that produces such an incredible number of top high school grads with no other flagship to compete with.