Honestly, I felt like it cheapened my degree.
My undergrad university in the UK (Bristol) was/is widely regarded as an "Oxbridge reject" school, full of those from the upper-classes that were expected to go to Oxbridge but failed. The private schools (called public schools in the UK) were outraged when Bristol announced that they would start offering placements not on academic achievement but on potential, so a straight-A student from Eton would be evaluated about the same as a straight-B student from inner-city comprehensive schools where the teaching was noticeably worse. It was a great idea.
It is wrong, if not dangerous, to evaluate universities by abstract metrics such as research or academic performance. Universities are much, much more. They are the student newspaper, the radio station, the sports teams, the activists, the hackers, the politicians. Students undoubtedly benefit from exposure to all.
(Disclosure: I'm a white middle-class Englishman who went to a Top 10 univerisity in the UK and now I'm a PhD student at the University of Californa, Santa Cruz)
Still, I agree. This seems like a fantastically inefficient way to meet people with different backgrounds.
Also, even tuitions at private colleges are massively subsidized - the subsidies just follow the students (e.g., subsidized student loans, need-based aid, etc).
You got any evidence about the trade-offs on that? In my experience, the very diverse student body of my alma mater formed closed cliques (racially, nationally) and the wide variance in backgrounds caused most, if not all, classes to slow down to the lowest common denominator.
Also: Gauchos >> Banana Slugs
I fail to guess in what sense research and academic performance are somehow "abstract metrics" while non-academic diversity isn't. You may dispute their effectiveness but SAT/GPA scores, number of peer-reviewed publications, million dollars in grants, etc. are certainly less abstract than the color of your skin or the word on the street about the school you attended.
Does the presence of a sports team make students feel more school pride, increasing student performance? How much does commute times factor in? What about whether there's political activist students that successfully negotiate better benefits for TAs?
If you look at metrics alone, you lose the woods for the trees. It looks like CalTech have their head on straight, at least according to some comments here, about potential and passion, not about numbers. This is what the blog post advocates, and that I think is a very short-sighted position to take.
Why should the taxpayer or the wealthy donor be fleeced to provide zero value to the unwitting student (who probably doesn't have enough maturity to make decisions independently anyway)?
I agree with you that it's a strength of Carnegie Mellon (weakness of CalTech) that it has excellence in a broad (narrow) range of academic subjects. But that's not an argument against the author's thesis: the pursuit of non-academic diversity has a major negative impact on the academic quality of most major research universities in the US.
(Disclosure: I'm a white Princeton Alum who played one of the varsity sports which were not considered in admissions, so I took a bit of umbrage at those athletes who got a boost at the admissions office. Not that I'm a petty person or anything....)