I know Alabama is over 50% out of state students now. I think it's about 52%. And increases every year. But as you said the University and legislature don't care because they can get more money with out of state. If the university had their way I doubt they would have hardly any Alabama kids as students.
The legislature in Virginia has to constantly remind the state universities that they are the University of
Virginia, and
Virginia Tech, and as such, they have an obligation to educate the young citizens of the Commonwealth. It is the
schools that want to drive up-out-of state numbers, because it eases budget pressures. Out-of-state parents do not vote in state legislative elections. When "Junior" is denied admission to UVa (or William & Mary or Va Tech), Virginia-daddy gets upset and daddy votes. Out-of-state daddy does not get a chance to vote for Virginia legislators.
I believe the schools are making strategic mistakes by slighting in-state students. If one compares alumni donations, in-staters tend to donate more than out of state alumni. Maybe because they live with constant reminders of their alma maters. To create in-state alums, you have to admit instate students.
I have no way of knowing, but if I had to guess, I would wager that Alabama alums move out of state post-graduation less frequently UVa and Va Tech alums, and I'd also bet that out-of-state alums donate to the University at a lower rate than in-state alums.
Maybe someone on the board who knows can illuminate this question.