Because people are paying for it, we are getting much higher quality than we would if it was completely government funded. Also, it's still being paid by people who want it rather than it just being a tax.
Because it's expected a lot of people are getting an education that wouldn't be educated otherwise. This is improving our overall productivity.
The rising cost of an education right now is an issue, and we can do a combination of letting it self-correct (many businesses and students are realizing they really don't need a BS to do a good job) as well as adding public schools so more people can get the AS to get a good education.
I don't see any reason to expect that this solution is less optimal than any of the other ones you have mentioned, and it seems much cheaper than revamping the entire system.
To me the root cause of rising health insurance costs is the rising cost of all the lawsuits that doctors and hospitals deal with. When we were just paying for the doctor's education it was a little expensive, but nothing like what we are paying now. You're really just padding the budget to deal with legal fees. A more moderate court system (that awards smaller payouts) would knock this out easily.
I am not familiar with the housing issue, I would have to learn more about it to make a comment.
But I really do think the issues you bring up are best solved with a moderate solution.