Also, aren't most or at least a great many of the most famous universities non-profits, competing for donations instead of trying to maximize shareholder value? I hear that in for-profit education, the average student is treated better and so is the average lecturer (you want to please your students whose money feeds you and you want to attract lecturers whose primary motivation is financial and who're good enough to please your students, so the for-profit institution kinda has to treat both well to survive.) Somebody living off donations, on the other hand, only has to please people donating the money (and someone living off taxes only has to please government officials), while pleasing either students or the teaching staff is no longer essential.
(I don't have firm or specific opinions on how higher education should be run, in general, just commenting on your points.)