There’s an argument that treating students as “customers” has led to all kinds of bad outcomes. One example is it creates an incentive to invest in all kinds of fancy infrastructure (fancy halls/dorms and even lazy rivers) because that is how they attract more “customers” but this ultimately becomes a huge driver of educational costs. The same can be said for watered down courses etc.

I would also add, look at the astonishing success (sarcasm), of for-profit colleges. They would have to be considered the extreme of treating students as customers and I don't really know any serious employer who accepts a degree from for-profit colleges. Unless the college is so new the employees hadn't heard of it before and don't know much about it.