But the real alternative is another (better) proposal, not keeping things as they are.

Sure, but the school can't justify spending triple per student than standard dorms cost. Even with the gift, the school needs to be financially responsible, and making a huge leap in quality of life would seem financially irresponsible when thousands of other colleges squeeze kids into forced doubles and triples. This is a step towards giving students both privacy and spaces to socialize, with some drawbacks that are a consequence of not having infinite funding.