"I remember reading a number of years ago about how much it costs CalTech to educate one of its graduates, and it was something on the order of $300k/year."
But that's not the question. With all due respect, it's not even all that interesting. If they had a million dollars to spend per student, by golly, they'd spend a million dollars.
The question is, how much would it cost in a competitive market? And given that engineers are the minority, how much should an English degree cost in a competitive market?
How much can you save by not even being on campus? By not using professors, which rhetoric aside you simply do not need for most courses? (I'd much rather see more professors doing more research and teaching grad-level courses.) How many teachers do you even need? Why are we paying people to do the moral equivalent of going to the front of the class and reading their notes? (With varying degrees of literalness.) And then paying them again to do it next year? And then paying hordes of such people to deliver the same classes to hundreds of institutions? To put it in HN terms, just how disruptive could you get while delivering the same basic product, or possibly even a better one?
"and so I feel it's reasonable to factor that in as a cost/expense that is not going away any time soon."
People say this a lot. I think people are culturally conditioned to say it. God forbid we radically rethink anything about education. But I think that you gave someone a choice of spending 20K/semester and living on campus, or spending 2K/semester and living where they chose and getting a degree just as good in the vast majority of ways, that not only would quite a lot of people made that choice ten years ago, but in the coming years, when money is going to be a lot tighter for the middle class, the 20K option is likely to just collapse. Just about the only thing holding it up right now is a whole lot of people like you who aren't willing to concede the possibility that quite a lot of the accouterments of college as we now know it are incidental to the the actual product.
Don't think with your standard cultural conditioning; think like a disruptive startup founder. The fundamentals of this industry are all wrong and it's going to burn. For better and for worse; disruptions are rarely all for the better. I'm not saying I celebrate every aspect of the change, but the fact that I think it's a mixed bag isn't going to change the absolute economic inevitability of the changes ahead.