Well the competition for faculty is just something I read in a few studies - I don't know why it would be different now. Having been on some college visits recently (I'm a somewhat older guy), I would have to disagree w/ you re: gyms and other facilities. We're going to mid-range schools (and I went to a higher-end in my day), and there is no comparison. I can see where the money is going when I'm touring some of the schools.
I guess the question has to be asked...do kids need all of that stuff? To me, it's just the nature of capitalism as we practice it. These things, as well as aspects like enhanced career services, are just things more & more schools are offering to compete for the best students, so they are becoming standard. And the market will bear it, because more & more kids want to go to schools that offer the best academics, services & amenities.
In that respect, I'm not sure much can be done on costs.
