Right, universities are about learning and creating new knowledge (research). But I think you are missing the point. OSU is the only institution in Ohio that earns a profit on its athletics budget. If all the non-profitable athletics departments were eliminated, the student life component that you mentioned in comparing any school to another (with the exception of OSU) is not an issue. In the end, it's a wash and the students would end up benefiting by not having to subsidize athletic departments anywhere.
And if all the non-profitable athletics departments were eliminated nationally, OSU would play Texas, UF, etc. quite frequently and that might actually get boring. In the end, OSU needs the other non-profitable schools so that they can buy 4 OOC home games per year. And this is not me OSU bashing...I've attempted to remain objective in making these points.