While the whole process seems like a cluster****, I think it could actually work out positively if it ends up being much different than was originally planned.
It could be kind of like a much smaller version of the IUPUI campus. Basically, there's one campus in Indianapolis that students can go to and enroll as either Indiana or Purdue students.
Because DSM is a big market, and the three public schools want to share it, let them compete. They can each run programs there (probably night school, and ISU's MBA program can move there) and the students could be pursuing either UI, ISU, or UNI degrees while being on the same campus. Let the students decide what they want, and over time, I imagine each of the universities will have carved out their own niche in the DSM market.
I think the BOR should at least investigate a model similar to (but on a smaller scale than) the IUPUI campus in Indiana.