alt Hacker NewsIn Europe, university is treated as education for adults, not your entire life. Most universities are not campus resorts like in the US, but just buildings in the city itself, students live a normal life in the city, they rent a apartment or live in a dorm, take public transit to get to places, do sport at a sport place independent of the university, etc. You can live a well rounded life that way. The university is there so you learn your specialization. Of course people make friends there, but it doesn't have to be your entire life, and the university administrators job is not to meddle with people's social lives to make them "interesting", but to allow learning.
Our oldest unis are generally "downtown" or similar - Harvard, Princeton, UVA (sort of - Charlottesville is a really small city), etc. Though most do still have their own dormitory housing, at least for underclassmen.
The large campus-style uni is fairly recent creation - many came out of the land grant system during/after the Civil War. And even as newer unis have been created, they've followed that general design (even though they aren't land grant institutions).