In a country with paid tuition, universities need to provide education that provides the fastest path to paying off student debt, otherwise they are doing their customers a disservice in life.
Far too many programmers exit from university without the skills that industry needs. If universities are places for free learning that's okay, but if you're paying $$$ for such a degree and been saddled with a mountain of debt then I think you've been robbed.
(Not that I disagree with your general thesis though. I just think it applies to free uni tuitions as well...)
Governments everywhere subsidize the arts because a society where people only go in to economically productive careers is culturally barren.
So I don’t think any Government enlightened enough to offer mass free university tuition would be unenlightened enough to see universities as mere training centers for industry, rather than as places of higher education at arm’s length from industry.
Whereas when individuals pay fully for their own tuition then they do need to see degrees as training for industry because they have to pay the money back with interest. Interest accrues with time so they need to be productive as quickly as possible. If universities have their students’ best interests at heart then they need to acknowledge this reality and design courses to give students useful skills that will let them pay the money back ASAP.
Research universities have theoretically oriented curricula, because that's what they are good at teaching. They also operate from the principle that universities are places of learning, not places of teaching. The curriculum is just the bare minimum, and students are expected to learn more on their own, according to their interests. For some people, this is exactly the right kind of learning environment. Others may prefer educational institutions that are more active in guiding them towards the right path.