Is it necessary for there to be student amenities paid for by the school? Why should tuition pay for a bunch of ancillary nice-to-haves instead of, ya know, the education?
Because schools are in competition with one another to attract students (who have the ability to broadcast applications to multiple schools). The campus life factor is a major part of a student’s decision.
Put yourself into the student’s shoes. If you had the choice between two schools of otherwise roughly equal academic reputation but one offered luxurious residences while the other housed students like medieval monks, which would you choose?
Public schools shouldn't oblige and instead offer the lower cost option. The market will then sort this issue out in a few years. Right now its public = expensive and private = absurdly expensive
