The Purpose of Higher Education Today

After reading this article on Time.com by Jens Erik Gould, I thought back to Louis Menand's piece on higher education, and what its purpose is. In his article, Menand argues that there are three theories of higher education:
1) Higher education is meant as a societal sorting mechanism to sort the more intelligent members of society from the less intelligent ones. The smartest people will graduate and receive high paying jobs.
2) College is for learning. A learned populace is necessary for a successful democracy. By sending the masses to college, a large portion of the society is socialized into the same culture which also makes for a successful society.
3) College does all of these things. While it is meant to "separate the thinkers from the stinkers" (as my 8th grade math teacher would say), it is also meant to socialize and educate the masses.
According to Menand, American higher education has followed the third theory since the end of the Second World War. However, in reading Gould's article, it seems that the American perspective on education has shifted away from theories two and three, and more toward the economic value of an education that is stressed in theory one. 
In his article, Gould details the three tiered California State higher education system, which offers community colleges, California State University campuses, and various University of California campuses. Gould argues that it is this system that has rendered California "the eighth largest economy on the planet and home to Silicon Valley and a large share of the biotech industry". Gould then admonishes the state of California for cutting funding to its universities, as this led to tuition to many of its universities more than doubling.
Gould does not trouble himself with the fact that hundreds of thousands of California residents won't be able to increase their knowledge base or be socialized into mainstream society; he focuses on the individual and societal economic effects of this disinvestment in education. Gould stresses that "for every dollar the state invests in higher education, it receives a net return of $3".
The tone of Gould's article is entirely economically oriented, without a thought regarding the education of the citizenry of the individual person, as has the attitude of the American people toward education. 
Why do you think this it? Economic conditions? Apathy?