Many states still offer rather low OOS tuition rates even before any scholarships or grants - South Dakota, Montana, Idaho, Wyoming, Utah, New Mexico for the reason that they need bodies. It benefits the instate students to have the OOS students there so they can offer more classes, have better facilities. Utah and Missouri make it easy to become a resident and benefit from the lower rates.
I think it benefits flagships to have the diversity OOS students bring. Who wants to only go to school with students just like themselves, who have studied from the same text books, who have taken the same state government course in 4th grade and 8th grade, who have had the same TV news and political bodies for their lives? Bring in some other views, other experiences. What percentage of OOS makes the perfect mix while still being fair to the state residents to get an education in their state, I don’t know.