Exactly, there are a lot of good private universities.
There's nothing wrong with for-profit schools in theory. It's a socio-economic problem. There's already so much money flowing through the US university system that the vast majority of for-profit schools are predatory institutions targeting lower-class, under-educated people. Their primary business model is to convince students to take out loans to pay for a white-collar education that won't make them any more employable.
The educational part seems to be a facade for the big money/big institution part.
(Bitter much? Sure. ;-)
Absolutely.
The problem is our university system as it stands is now really structured for profitability. The system was originally designed to cater to wealthy students and when public universities came to be, they kept the same model, and used tax subsidies to maintain it.
An effective for-profit education system would look nothing like our current university system. But a higher education system that doesn't match our current system isn't useful for students because the majority of them are looking for degrees, not necessarily an education.
Theoretically there's nothing wrong with for-profit schools, but the current educational climate prevent them from working. For now, for-profit education really only has a place in domains that can be taught adequately in less than a year and where the student's outcome can be readily assessed.
I think this applies to far more schools than just private for-profits like ITT. There are many recent graduates from non-profit public schools that have mountains of debt and very little job prospects.