I would say that when it comes to matters such as illegal aliens that the states should not have any ability to make self determinations.
Immigration into the republic is a matter for the feds and the feds alone.
In an instance like this it would only take California delaring it unconstitutional to not give them in state tuition to have that cascade into states that did not grant it and did not want to.
That's reasonable.
The argument for providing illegal aliens in-state tuition of course is that the children have met the "residency requirements", and we shouldn't punish them for the crimes of their parents.
Also, since we know that attending college will make people more productive citizens, we might have a vested interest in educating them.
My response is that whe the college is rejecting in-state legal residents because they don't have money or room, we shouldn't be letting in illegals.
The crazy lady from Rush's program yesterday might instead argue that if we let illegals go to college, they'll be as uppity as americans, and we'll have to get a whole knew batch of illegals to come to the menial jobs we are too educated to do.
(If you didn't catch her, she argued we needed illegal immigrants because 30 years ago 43% of us didn't have a high school diploma, and now it was only 9%, so we didn't have enough ignorant people for the unskilled jobs).