This disruption is already happening with the rise of co-operative education. Schools like the University of Waterloo have amazing job-market outcomes with 5-year degrees that alternate between education and work terms. You graduate with 2 years of work experience and connections with employers to land a job after you graduate. Now they're the best school in Canada for CS and on par with MIT/CMU.

Students value "prestige" because they think it'll improve their life. People see people that go to a good university and get good jobs and think "wow this university will make me successful!" because some of the prestige rubs off on them.

I don't believe that's a good mechanism for improving outcomes. I think there are better ways, and many schools are implementing those ways right now.