1) Despite an appearance of being "left leaning" (according to polls of faculty political sentiment) they continue to gatekeep education behind prohibitively expensive tuition that is out of reach of lower economic strata without crippling debt, and have simultaneously struggled to produce graduates whose economic differential easily makes up for that expense and lost work time.
2) They enjoy a tax free status while receiving significant tax money despite many failing to grow their student bodies in tandem with the growth of the US population, leading to people questioning whether they deserve those benefits as institutions that serve the public.
3) There is a sentiment that basic literacy and numeracy of graduates has dropped over the last decades outside of a narrow area of studies, because of a shift to a model where students are customers buying a credential instead of getting an education.
(These are all interrelated, of course.)
this is mostly true of elite schools (who nowadays are mostly selling a brand more than an education), not so much of state schools
In reality I don’t think people’s political opinions change very much and they are just mad that their children individuated.
I think this probably the case as well. If I look back at how my own views shifted, the shift very likely would’ve happened regardless of if I’d attended university, assuming everything else was the same. It wasn’t the university that resulted in the shift as much as it was my getting out of my local bubble out into the world and experiencing it for myself.
Basically any kind of life experience that brings a young person to actually think and more deeply consider the world around them is likely to result in some level of individuation and shift away from inherited views. It’s perfectly natural and healthy.
[edit: I should admit that it's been 20 years, things may have shifted a lot]
That seems to be missing the elephant in the room - they sent kids in their most formative intellectual years to immerse themselves in a culture where there is a very high child:adult ratio. Then the kids come back with this wild culture that would make a lot of sense to a bunch of teenagers and young adults. It isn't just that the kids individuating, it is dumping them into one of the most elitist, authoritarian and artificial subcultures society maintains - populated mostly by near-juveniles I repeat - giving them independence to form themselves and discovering that dislocates them from their parents subculture.
It should be obvious that will happen but parents tend to be pretty dumb. No real training course for parenting I suppose.
I don't think you're wrong about the axes for "academic intelligence" or "political outlook". But those are just two of many. Geographic, racial, economic, class (in the European sense), language, culture .. these are all equally valid, and likely to vary more in a university than in a workplace (even in the military).
(Yes, yes, there's vapor-ware, and useless products, and certainly "fake jobs". Those existed in the '40s, too, and in any other time period or economy you care to look at.)
In my view, the problem is that white collar workers stopped thinking of themselves as Workers. Any of us who rely on a company for a paycheck (and, perniciously, in the US for health insurance) aren't Capital, even if we make high salaries. Maybe we're aspiring to join that class - we'll hit the startup lottery, or FIRE, or our IRA portfolio will go up forever - but we ain't yet. (That's fine, by the way: I'm using Marxist terms, but I'm not a Marxist. Pursuing financial independence, and the real - even if remote - possibility of attaining it is what's made the US such a dynamic economy.)
However, allowing our aspirations for wealth, or the relative comfort of white-collar jobs, to lead us to identify with the political goals of Capital - or worse, to adopt an elitist attitude towards people who work in what you call the "real economy" - is what's got the US into the mess we're currently in. That's the "genius" you identify in the present system, and the origin of the cruelty within it.
In reality, we're all Working Class (well, 99% of us are - although that proportion is way out of whack on this board, of all places!), and we need to (politically) act like it.