There's no doubt that universities represent declining value for money to their students[1][2]. But the reason we tell young people that they should go to college if they want to achieve something in life is because higher education, particularly at the top universities, remains a great investment.
[1] - http://www.economist.com/news/united-states/21567373-america...
For example, most young people are told to set their sights on college. Realistically, most young people are not suited for "4+ years of uninterrupted study." This might not seem obvious if you took AP/honors classes your whole life; in that case, the mean is probably much lower than you've been conditioned to expect.
A friend of mine in high school wasn't the brightest guy when it came to the core classes, but was hands down THE guru in auto shop. The guy could disassemble an engine entirely and put it back together squeaky clean before he could even drive a car himself while I would (and still do) struggle to even change the oil.
He's now doing just fine for himself working as a manager at a local auto repair shop, and will most likely be happy doing that the rest of his life.
The US educational progression has a strong bias toward one type of intelligence, and seems to more easily sideline people like your friend.
As far as I've read, more education is good for anyone who can afford it. (Even at its inflated prices, a college degree remains a good investment for most.)
It seems to me the real problem is that most people who'd do just as well with a smaller university education are paying 5x as much for a big/name school education. Which, for those taking on debt, is hardly optimal. And their willingness to do this is what drives the prestige/price bubble.
So, really, the correctable social prejudice is not breaking "everyone should go to college" [1], it's breaking "small school education is inferior to big/name school education". [2]
[1] Though that could certainly stand a weakening and reformation to "most people should do post-high school education", with a heavy dose of de-stigmatization for trade schools, community college and the like.
[2] That prejudice is undoubtedly true of a minority of places and programs, but rarely; and extremely so in the case of undergrad programs.
Travel can be education. So can reading. In fact we should always be learning something new. You don't need a university for that.
It's rather like the famous anecdote of the would-be musician who asks a famous self-taught master how they should approach becoming a musician. Paraphrasing: Aspirant: "How do I go about becoming a great musician?" Master: "Go to school." Aspirant: "But you never went to school." Master: "I never had to ask anyone 'how', either".
Which is to say: those who are capable and willing to do self-directed learning will do so regardless. For anyone who seeks/takes advice on how to proceed "go to college" remains the best answer.
They do have a coming problem though. With the escalation in price and the well known stories of college grads moving back in with their parents, their next set of customers are starting to question if college is for them. Essentially the education industry has started to eat its young and does so even more every time prices rise above reasonable amounts. The other thing to consider is that the cost for college has risen much faster than the label price. Given that most students need loans, when you factor in interest paid and the long term rise in interest rates - the cost of education has REALLY gone up... much more than is reported.
At some point things will correct - either the government will step in (unlikely) or there will be a fall out when inevitably their customers realize that education is more of a liability than an asset.