The explosion of administrative staff is crazy universities keep cutting teaching positions and increasing admin.
It seems like there should be a market for low overhead small schools with high paid teaching staff.
1) Nearly all university students are making their decision when they're 18, so a lot of them are mostly interested in non-academic aspects of their school
2) It seems really hard to actually start a new university. Anecdotally, every university I can think of is quite old.
3) This is probably related to (2). The benefits of universities aren't really dependent on good professors. The advantage of top schools in both educational progress and student outcomes can probably mostly explained by signalling, filtering out weak students before they arrive, university culture, and networking. None of this has much to do with professors.