I didn't mean to unsettle this entire debate again - I feel like it has been raged across this forum repeatedly in the interest of god knows what - but you paint these proclamations in such stark terms that it is difficult to take seriously. I think the gist of your idea from a law school pareto-optimality point is well taken, but as cotiger suggested, the circumstances in which that calculus is applicable are so infrequent, and the the range of direct comparisons so narrow, that what you are saying only really holds in a theoretical universe of bizarrely mechanic and uninspired values.
I don't think the circumstances are so narrow that they are law-school specific. The beneficial actions tend to remain the same across any grad school. So the circumstances then become "17-year-old who knows he/she will, in all likelihood, be going to grad school." This is still a relatively narrow group but it is not so insignificant that a determination of optimality is ordinarily not applicable.
1) You are discounting the number of people for whom it is cheaper to go to a well-funded private school than the local state school. For many of my friends, USC was cheaper than UCLA due to financial aid. Northwestern was cheaper than Cal. And top LAC's routinely provide aid packages to a plurality of the class that rival your $80K tuition figure.
I'm not discounting the financial aid aspect. You understand that the point of my suggestion is that people should be doing a cost/benefit analysis. The group of school that provide a top-line benefit to go with a top-line price (~200k) is VERY narrow. As I've said, there are only six that make me comfortable doing in most circumstances. If you have no GPA concerns and the better school is cheaper? Well, duh. The overwhelming majority of schools aren't worth $200k but schools may provide the right value at lower COAs. It all depends on the opportunity cost.
2) Of the roughly %45-50 of students at "top private colleges/universities" who aren't on financial aid, the majority of them hail from absurdly wealthy families where it makes no difference from an economic or strategic standpoint to go to a state school just for the money. The grade inflation at many Ivy's and Ivy-level institutions actually makes it a better call for these wealthy students to attend top schools than compete with their working and lower middle class peers at CUNY, UIUC or UC Irvine.
Being able to pay $200k for a UG education, or having an income where you don't qualify for financial aid, does not necessarily make a family absurdly wealthy. Not even close to the point where money is no object. Does it make them upper-middle class? Eh, usually. That's definitely the average T14 student. But you can tell paying $200k for UG did not mean an endless pool of financial resources because a lot of them come out of law school with six-figure debt. The group of people whose folks paid $200k-ish for UG but need to take out significant law school loans are actually probably the plurality financial situation--I'm guessing it exactly describes maybe a third of the T14.
If money is literally no object, then yes, go to the best school. Particularly if it is a grade-inflated school. Brown might have a higher average student quality than UVA, but it is definitely harder to get a 3.8 at UVA than at Brown because of the vastly different grade curves. So absent financial considerations, if you were looking at GPA maximization, you can consider stuff like that. However, a public school can have a lower average GPA but have a student body so clownshit that the curve is somewhat irrelevant.
3) In your getting-into-law-school formula, you are forgetting that prestigious colleges do send more grads into T6 law schools than relatively anonymous state institutions than an average LSAT-adjusted metric would suggest. You know this, because most of our class (and nearly EVERYONE in my small section) attended a top school. Moreover, the "softs" you gain for the purposes of an application are in general more impressive from top schools, just because of the opportunities afforded. My college, to take an example, had the highest number of fulbright recipients per capita in past years (I'm not sure if this is still the case, but it is to prove a more general point). This is not a negligible soft, whether in life, hiring, or applications to law school. For prestigious internships in finance, law, and government, its undeniably easier out of Duke, Dartmouth, or Washington University than Idaho State. These do have an impact.
Most available evidence suggests that overrepresentation of prestigious colleges, when compared to an LSAT-adjusted metric, is only scant, if it even exists at all. E.g. CLS is composed of roughly one-third Ivy students. What percentage of the 170+ scorers actually come from the Ivy league? Perhaps not a third, but within the CLS applicant pool, I'm guessing somewhere close. Remember that at all but a few schools, a 170 is performing more than one standard deviation above average (top 16%). And when we have seen evidence that a top school is being favored or a no-name school is being disfavored, it is only usually by a point or so relative to the average. Law schools really place a staggeringly low weight on UG quality.
4) In states like CA, a "public" school education is well over $100K now with tuition increases. The cost delta between going to UCLA, for example, and somewhere like Penn, lowers every year. Also, you are less likely to graduate in 4 years due to budget cuts and the strangulation of required classes for juniors and seniors, so you are spending more tuition money (albeit at the $20K-$30K level) and time (from a loss of opportunity standpoint) than you would otherwise. Again, your "5 semester" circumstance is extraordinarily unique. (I didn't even know your college had in-state tuition until I met you, FYI).
This all goes into opportunity cost. State school isn't going to be TCR for a non-grad-school person if it isn't actually cheaper appreciably cheaper. Going to a state school in five semesters was a HUGE factor in why I'm not going to have debt. My family will spend about $300k on my education. That's certainly not nothing but it's well within the financial bounds of most upper-middle class families. A lot of students' families are spending about that level on them, but it's been misallocated. $200k on UG and another $100k on law school leaves the sticker payers with $150k of debt (or otherwise leaves them with significantly more than they needed to have). Side note: the idea that UG needs to be four years is very outdated as well. Anyone can graduate in seven semesters, anyone with a little diligence can graduate in six, and with some AP/IB credits graduating in five is not that difficult.
5) Significantly, as others have suggested, you can't know you want to go to law school at 17. You shouldn't. College should be about self-exploration. It's how people become socialized in the 21st century. We need that process, and we sure as shit don't need more attorneys, especially the gunnerish teenager wanna be attorneys. We need more social workers, engineers, math teachers. It might sound in a bourgeois conception of higher education, but we do not operate on a structure of technical training. From a policy point of view, what you are suggesting is more like the European system of legal education (and not just legal): students acquire their legal degrees out of high school. Unless you are suggesting that we should adopt this system, the argument that the straightforward path to law school and ex ante knowledge of that path is TCR fails on all counts. It sends disoriented and socially maladjusted people into a shattered and unstable work force.
Being absolutely dead sure about going to law school at 17? Eh, maybe not (I won't rule it out completely--I'm sure there are some total law geeks who have been dead-set forever). Having thought about it for a while, considering that it might be a significant portion of your life, making plans in case it is, while leaving yourself open to changing your mind if something REALLY gets your blood flowing in UG? That's what I did. I see no problem. I'm not against finding your passion or whatever if you really don't know what you want to do. No one demanded it of you. Just saying law school, like anything else, provides more advantages if it's thought out well in advance. And yes, the European system is preferable.
6) Lastly, you are ignoring that students should be choosing college based largely on fit. It isn't like law school, where an ROI computation is very useful due to the structural demands of the specific job market and the similarity between institutions and curricula. People who thrive in smaller environments should go to a small liberal arts college if they can - they will more likely cop dat 3.8+ there then in a huge, alienating environment. 18 year olds are very impressionable and fragile. Similarly, someone who loves mass-action school spirit and having a billion friends should be at a large school, and that is their choice. Fit cannot be ignored here.
As someone who spurned the higher-ranked state flagship, and a couple of the lower Ivies, to go to the smaller school whose curriculum he liked better, I promise I have the appropriate level of appreciation for fit. If it helps you be more productive, then great. If it's just about what you like, then you're sort of buying that pleasure. Determine for yourself how exactly to value that pleasure.
Rather than pick apart these points in your favored quote-by-quote fashion
Oops. Maybe I should have read that earlier.
consider that they may suggest an alternative but no more flawed or less reasonable understanding of the process and purpose of higher education, and that they may be more compatible with your analysis than first blush would admit.
Of course they're compatible. You're just postulating an entirely different student and changing the values of some of the variables. It was never inconsistent with the rationally beneficial move.