I think it's because high end education is hard to scale. I've yet to see an alternative to small class and 1-1 teaching (office hours) that reliably produces as good results.

So if it's hard to fit in more students per professor, then the issue becomes finding more teachers. I suspect that might be more of a bureaucratic/political issue. Research and teaching are conflated, putting teaching at the bottom of the totem pole and pay scale for most aspiring professors unless you're famous for being good at teaching.

Maybe there should be more dedicated teaching openings.