Thank you for taking the time to write this - very well thought out and well reasoned.
I don't think one can ignore the disconnect between the stated charter of top universities (basically to do research) and the motivations for the majority of undergraduates who actually attend them (prestige, which hopefully leads to a high paying job). I doubt that all donors give these institutions donations to further their research goals. I know for one that if I were given the option to focus the impact of my donation, I'd readily choose it be applied to a practical, skills-focused program within the research-focused university that I attended. Furthermore, the undergraduate programs of top private universities in the United States aren't funded by tax payer dollars - they're funded by sky-high tuition. As the OP shared a class applying to the undergraduate curriculum at Stanford, a tax money argument isn't relevant here. If the course were geared toward Masters or PhD students - different story.
Finally, universities seem incredibly resistant to re-evaluating their place in society in the 21st century economy -- at least in the U.S. From childhood, a college degree is pushed as a necessity for financial success. Top universities like Stanford are sought out not just for their academic rigor, but for the network and prestige afforded to their alumni, who can parlay these things into a strong career path and a high paying job. Univerisities seem deaf to this reality. I'm sure they understand it, but for whatever reason are reticent to acknowledge that their role in society and to the economy has evolved since their founding.
I think Stanford should be applauded for offering this course - would love to know how many students registered.