Maybe they should call this a marketing fee? It enhances the national visibility of the university so it's a POTENTIAL benefit to all students. I've pursued and gotten MULTIPLE jobs out of this state including on Wall Street and feel like going to the U of M made a difference. People doing the hiring aren't all super qualified, but they see you went to a Big Ten school and that probably matters to some of them vs. say Mankato State. It helped me bond with my co-workers from other states that also went to large schools just like the Vikings and Twins did when they were Giants or Yankees fans. It helps people think less about Minnesota as just flyover country.
I have two kids. One is going to the U in a program where I think that matters, another is going to a community college at a fraction of the cost and I think that's perfect for him. I'm confident both will do fine in life. Having a nationally recognized and relevant school in this state matters. That costs more. I'd rather they stick that $200 fee on the students than on the average Minnesota tax payer...although that happens too. As one poster said, students and future students can vote with their feet. If they don't see how all the extra expense at the U will help them accomplish their goals, they can go to someplace like Mankato State and get the same degree (or even better degree in some fields) at a fraction of the cost.
Most of us are happy we are playing in the big leagues in a P2 conference. Teams like Washington State and Oregon State have been left out. I'm sure that has a negative impact on those universities and their ability, not only to compete for the best minds in their state, but nationally. How large that impact is, I do not know.
Again, I view this as a marketing expense. It is hard to quantify whether it is a worthwhile one so I have no problem with people that are upset about it.