that's more or less how it still works at the good private schools, with exceptions at the margin for extremely bright talent from less wealthy family/means.
public schools are supposed to break this pattern, but the best ones basically have turned into the same thing (california, michigan, virginia, north carolina, etc.) with their own hierarchy of elite campuses/locations and in-crowd associations (greek, etc.)
the entire system breaks down if you treat it as something fundamentally different, or have some invented set of expectations for what you get out of it.
I put "liberal" in quotes, because real liberalism is much more broad-minded than what's on much of our universities. Real liberalism isn't about making your opponent shut up; instead, it's about recognizing their right to exist and to have their say.
Sorry - by diverse set of people are you talking about people who would be inclined to get and would be accepted to receive a liberal arts degree at an elite university?
At one point, I think a university education served, sociologically, as another barrier separating the upper class from the rabble. Do you think diversity of opinion was perhaps more tolerated when the only students were children of the rich? Would universities have defended their cultural values as ardently as they do now, when membership in that culture was enforced differently?
https://en.m.wikipedia.org/wiki/Pluralism_(political_philoso...
I agree with your sentiment, but I think downvoters are misattributing it to the Wikipedia article I linked to.
Sorry for the confusion.