Many state universities changed those transfer policies when states made deep higher ed budget cuts during the great recession. The alternative in our state was closing branch campuses (thereby making college even less accessible for most of the state).

Lots of universities in the US are lavish and expensive. Our state's branch campuses are the definition of utilitarian. Tuition is some of the lowest in the country. Salaries for professors at the branch campuses are lower than what we pay our high school teachers. Very little admin overhead. There's simply not much to cut.

Anyways, not saying it's right. But if you cut higher ed budgets, higher ed will get more expensive to the end user. Especially if the system was already hyper-efficient. Limiting transfer credits is pretty much the only way to make things more expensive to the end user without increasing tuition.