That's usually the problem. There is virtually no competition within a state university system. Even in open markets, incumbents are bloated with bureaucracy and politics but succeed by digging trenches around them to keep new players out.
A school’s academics are, in a way, secondary to the school’s brand/influence (with built in networking effects in the alumni base)
Imagine some crazy world where education-level is a protected class for employment and degree/school can’t be considered or explicitly asked about in job applications. The credential monopoly would be no more. Yet you would likely still see top colleges thrive for the same reason top fashion houses do: status signaling, brand loyalty, and a sense of belonging with patrons who subscribe to the same values