We could have a lengthy discussion about the notion of amateur athletics. I have had discussions where I had to explain to people that were baffled by the popularity of college football, that it wasn't a lower level of football so much as it was the top level of amateur sport. College football as we knew it was the peak of something that started with little kids running around at their local municipal park or what ever, where no one was getting paid, in fact everything was being paid for by supporters (namely parents). This advanced all the way up to college football which took this bake sale mentality and alumni support to an extreme.
What college football now has to do is find its place. The Olympics used to be amateur, now they are not (it's also been shown to be incredibly corrupt but that's another story). It wasn't destroyed in the process. However, there are sports which have become funded by the super wealthy to the point that that only the super wealthy can even compete in them. Larry Ellison spent hundreds of millions on the America's Cup, which while insane sounds a bit familiar to what I showed Phil Knight doing for Oregon. So part of the risk there is a sport that becomes too expensive for most to even compete in.
Now, what does that have to do with caps and free markets and so on. I guess you might be able to substitute the word capitalism to better explain what I'm getting at, which infers "for profit" which what we're discussing clearly isn't. On the other hand, you can bring up laissez-faire which is basically what you are alluding to, the notion that you shouldn't interfere. The thing is there is interference! There's a lot of interference and that's a big part of the issue. The first NIL laws came from the government, which is the precise entity that's supposed not to interfere according to laissez-faire! The schools are completely powerless in all of this really, they can't do anything. They can't pay the players and they can't forbid the players from being paid either.
Since we've gone this far, I want to further explain where I think people some people might not appreciate the nature of voluntarism as it pertains to college sports. College sport was always voluntary, not compulsory. This means once you agreed to go to a college, and participate in their sports, you were obligated to their rules. That's how laissez-faire actually works. You get to do what you want by having a choice, but those choices are not homogeneous. In this case the choice was to participate in a sport that was funded well beyond what it actually earned, and you got a host of things in return including an education, but you were not paid in cash.
What we are witnessing is someone coming into this completely voluntary thing, and saying you have to do this and you have to do that. That's not free anything. So now we have the amateur model that's being twisted into something it wasn't built to be. From a libertarian perspective, and I am a libertarian, it's actually pretty offensive to tell an entity it has to do something in particular, in this case they have to allow compensated professionals.
This is a whole can of worms, but it's just an incompatibility that's resulting in what we are witnessing. Remember though, this is something that loses money! This has to be emphasized heavily. College athletics lose money! College football as a whole also loses money! It's funded well beyond what it earns because people have grown accustomed to supporting this amateur model financially. It's now this bizarre hybrid and it just doesn't make any sense in the current state but I'm not even sure how one goes about allowing it to make sense. It's a square peg being told it has to go into a round hole.