The illusion is that all colleges and all college credits are equal. They are not.
That is inarguable, of course. (Well, not totally. U of Michigan would probably teach Sociology 101 in a huge auditorium with 400 students; the local community college would teach it in a class of thirty. There’s some benefit to the CC student there. But broadly speaking, you’re correct.)
However, the four year universities are really forcing the issue, here. Charging 4–5X for an elective credit that the student really doesn’t need (let’s put aside the “benefits of a broad-based liberal arts education” discussion for a moment) is a clear invitation to get that credit done in the cheapest way possible.
The non-elite 4 year schools need to get smart and start thinking out of the box before they become ghost towns. What does it really cost U of M to deliver a 400-kid section of Sociology 101? Figure that out, mark it up a bit, divide by 400, and charge accordingly. How about delivering Sociology 101 online? Figure that out, mark it up a bit, and charge accordingly. Organic Chem is more expensive to deliver? Fine. Figure that out, mark it up, and charge accordingly.
Not all credits are worth the same to the students, and not all credits cost the same to deliver. End the one-size-fits-all pricing of the college credit hour.
And for mercy’s sake, stop the practice of making the undergraduate program pay for the losses in research operations.