The most expensive schools are research universities. That's where the money is going: research is getting more and more expensive. By definition, the only problems remaining are the most difficult ones.

You used to be able to make great progress against a problem with a pen, paper, and a good mind. Now, to do anything notable, you'll need an observatory, a particle collider, a supercomputer, a top-tier bio lab, a chemical synthesis plant, etc.

Also, good pamphlet material like beautiful dorms costs a lot, but I find this argument to be weak considering most of the really expensive schools don't have very amazing-looking facilities.