Of course the OOS families are rich, because they get no financial aid and have to pay $60K per year. That’s what subsidizes Californians. Upper income Californians are in no way “squeezed out”, in reality they are disproportionately represented at upper tier UCs including Cal and UCLA.
Now a rich family may feel they’d rather pay for their slightly less capable kid to go to Oregon or Arizona, so they can enjoy PAC-12 sports, rather than UC Merced, while a poor family can’t afford to make the same choice. But that’s opting out, not being squeezed out. It’s no different to the rich families who send their kids to private elementary and high schools paying taxes to subsidize the poor families who send their kids to public schools.