Economists sometimes talk about different types of quality: actual quality and perceived quality. There has been a lot of spending that has been directed toward perceived quality at American Universities. That includes a lot of new buildings, a lot of maintenance, etc. In a certain way, it becomes a race to spend more. The more you spend, the better students you can attract, the better your status is and your alumni and industry donations are. All of this spending to entice 16 and 17 year olds to choose your university over another based on a cool study area, the prospect of free concerts, lots of student life staff to talk to and handle your needs, etc.
In the United States, university education is extremely hierarchical. If you're fairly well off (parents earning $120,000/year), you can easily get a free education at one of the top schools. However, go to a school closer to 25th and there will be fees even for those whose parents earn less. I don't think most countries third-level systems are nearly as hierarchical. As such, it's a big deal for universities to compete for students (and students to compete for universities) in the US.
A lot of that probably comes from American universities being completely independent of one another. I mean, sure, Imperial College London is independent from University College London, but they're ultimately responsible to the UK government. I don't think unbridled spending to court students from one government institution to another (via perceived, not actual quality) would really be looked upon well.
To be fair, the lack of coordination can also put American universities in an awkward position. As soldiers came home and took advantage of the GI Bill, universities greatly expanded their capacity to teach them. As that large increase in students dropped off, universities were left with a lot of excess capacity. A lot of the increase in spending can be traced back to that period as universities tried to keep their enrolment steady.
Ultimately, American universities are a combination of school and summer camp. Generally students live in university-owned dorms, they eat in university-owned cafeterias, and go to university-sponsored social events. All of that costs money, but in a competitive environment where students travel across the country to go to the university they perceive as best (that let them in), those costs are necessary from the university's perspective.