It's astonishing that parents place that much value in what undergraduate college their child attends. It doesn't really matter that much - it's amazing that 'adults' don't have a grasp of that.
some of it comes from legacy schools, I went to X you must go to X.
or
from the 1950's mentality that college educations meant something. In this day and age, most college kids have to take remidial classes in their first year!
We have too many schools becasue schools are cheep to build and have the protection of student loans which can never be forgiven. (why do we have so many law schools?)