@JackCW
You have asked a very intelligent question IMO, and a lot rides on what the answer will turn out to be. Unfortunately, there are several major objective factors that will influence the outcome, most of which have been brought up here, and several subjective factors that remain significant, one or two of which have also been brought up here. With that many variables in play, coming to a conclusion that has a decent level of confidence that it is correct is nearly impossible. But it is fun to talk about.
So for example. there is always the debate about the purpose of a college education being to get a good job when you are finished (what I call the trade school side, although of course I don’t mean that literally) and those that think the more important purpose is to hone a level of intellectual awareness, communication skills and critical thinking that allows one to lead a more fulfilling life and be a better contributor to our democracy and society. I am the first to admit the pendulum has swung towards the former over the last couple of decades, and certainly even though I favor the latter I don’t dispute that getting a good job upon graduation and being reasonably ready to perform at that job is important as well. But I think it is a mistake to only look at what was spent on college and decide its worth solely based on starting salary when you get out.
Having said that, borrowing anything north of $40,000 or so for all 4 years of college is, not to hold back, completely insane IMO. So if you can get into and attend an elite college without going into significant debt, then great. No problem. Whether that money comes from family wealth, merit scholarships, or great need-based aid from that college doesn’t matter. It is only what you owe when you are finished that counts. If one cannot achieve a level of available, non-borrowed money so that the bill at the end of each school year is $10,000 or less, then one should definitely look at one’s state school and other options. Because you (or whoever said it) are absolutely correct, one can achieve an excellent education at any state school in this country. And I wouldn’t even qualify it, as I think you did, that the teachers might not be as good. At some of these elite schools the profs might be more famous, but that doesn’t always make them good teachers or mean that they will actually show up to teach at all, but instead hand it off to a fairly green TA who also might or might not be a very effective teacher. Most profs at any flagship state school, and even at most non-flagship locations, know their subjects well.
As others have pointed out, there is a great deal of financial aid at these very expensive schools most of the time. Almost all have need-based aid, and quite a few have merit scholarships. But even for the ones that don’t have the latter, they often have very wide parameters for who qualifies for need based aid. That’s not to say there still isn’t a middle class squeeze in many cases, especially for the average student. But generally speaking the average student isn’t getting into a highly competitive (admissions) university and so should probably be looking at the state school alternative if the family is not wealthy.
Anyway, this could be a book, and in fact there have been several books on this exact question. It is a fascinating area to discuss and engage in speculation.
On, and BTW, while it is certainly true that UChicago markets like crazy and likes being able to brag about an acceptance rate that rivals HYPS, the biggest reason for the changes you mention is that is when they went on the Common Application. It was at that point the number of applicants rose dramatically.