For one, performance is only imperfectly correlated to revenue generation. So

Second, the worth of an individual is not measured by imagining a hypothetical universe in which all individuals at his same level would be eliminated. It's measured by the marginal value the individual provides. And the 75th-85th scholarship guys on the roster generally provide very little value either in winning games or generating revenue.

Third, there are also several factors to look at in weighing the value of the degree. States have an incentive to price the degrees at lower than market value by subsidies that benefit in-state students. Most studies would put UT value at well above its cost. And for players that would not be able to be admitted to the schools without the scholarship, that value is considerably greater. Flagship state school educations are quite valuable.

good enough to play. Interesting. What if another less talented player had their spot? I can think of thousands of players that would love a full ride scholarship. Would the results for the program change? Would less people go to or watch the game? Impact on revenue generation is the true driving force.

Just like the other 4 major leagues do it. Back out cost of scholarships.

-concessions, merchandise, ticket sales, parking, and TV revenue.

Let the team/school decide which players get what. Salary caps at aggregate, minimum player salary.