I dont see how it scales outside of a college community.
Scaling is a problem though, that's for sure, although many colleges are in fact towns outright (like Penn State). However, there's a big incentive for colleges to turn into hedge funds/real-estate holding firms which works against the educational mission of universities IMO.
As for overpriced... I mean, you get what you pay for. I don't think it's overpriced because I've tried the alternative, and I've found it lacking. Although I see several avenues to cut costs while keeping service levels.
But if you think college campuses are just for the students, you're missing half the picture!
I guess my point is, even college administrators from Texas can eventually learn that affordable housing for students and staff can be a benefit.