Why doesn't the college issue a 1099 for taxable scholarship income?

I am not one of the tax people here and I can’t answer your title question however: it isn’t just about the billed amount. Room and board are taxable. But along with tuition and fees include:

REQUIRED course-related expenses (e.g., fees, books, supplies, and equipment)
non-required expenses (computers, travel, etc.) are not exempt.

http://www.finaid.org/scholarships/exemptions.phtml