I don't think it hurts the overall bottom line of our athletic department, but it does put a significant burden on our season ticket holders. They gladly bear this burden because they know it creates an intimidating venue to play in from all the student noise, and because they benefited from the same arrangement when they are students. The implicit agreement is that students receive half-price tickets ($290 for a Sports Pass), but in turn show up before the game starts, stand and yell the entire time, do not boo, and leave only after the game is over. In the future, graduating students will pay more for season tickets so that our next generation of student tickets can be subsidized.
The 50 yard line seats directly across from the student section sell for an average of $1,000 per game when the price of season tickets is divided over six home games. We could sell the equivalent student seats to the public and make more money, but supply and demand would probably cause the price on other seats to drop. We'd probably come out ahead slightly, but it wouldn't be worth it. Our gameday environment is second to none, and we just got a ton of free publicity when our student attendance was announced.
I should also note that there is close to zero cell phone coverage (although this will be addressed in 2015), no popular music piped in during the game - just the band who plays classic marches, and very few contests or prizes offered to students. While there isn't just a ton going on in town, you can get to the outskirts of Austin or Houston in about an hour, and there is everything in the world to do in those places. We have no re-entry into the stadium and an active tailgating scene, so students must choose between the game or drinking. This flies in the face of all the excuses made by other programs as to why students don't show up to football games anymore.
White areas are the student section.