I don't think the point is that all students are worthless, but rather that colleges aren't this huge source of untapped potential that they are popularly imagined to be. This shouldn't really come as a surprise; most brilliant hackers/entrepreneurs know this, which is why they want to leave.

Think about it. All I want is to be surrounded by brilliant people working on interesting things, which college can't provide. Which is why I want to leave. But this same logic shows why funding college students isn't really an arbitrage opportunity. Even if you could figure out who the brilliant ones are, which is difficult, there are too many social and systemic forces pulling in the wrong directions.

(N.B. I'm not claiming to be brilliant myself, only that given the choice I prefer working with others who are.)