1. if you aren't Stanford, trust is hard to gain, easy to lose, and nearly impossible to gain back once lost. One bad placement raises alarms and more than one poisons the well for an entire degree program. There aren't many regional employers per degree program, and national/global employers are a "reach job" for most students. This is something that non-elite institutions know in a visceral and painful way. They are so careful with the few regionally well-regarded degree programs they manage to build. The folly of VC world was obvious to those faculty, and their students (such as me), from the start.
2. if you aren't Stanford, most of your students probably really do need a couple years (at least) of in-person instruction before they are ready for the labor force. Again, anyone who has taught at one of these institutions just knows! Once every 10 years you get the type who didn't really need the degree to learn the material, and you do your best to elevate them past the institution's typical bar for outcomes. But the other 9 years, 100% of students require a lot of real work before they are ready.
In other words, most institutions cannot afford to signal without that signal being extremely accurate. AND they don't have the type of students who don't really need the education. So they educate students and then signal the value of hose students not just through grades but also especially through things like referrals, letters, and so on. But, again, I wouldn't expect a Stanford or UIUC or Michigan grad to understand this world.