There are a lot of donors out there (Maybe not at ISU) that have businesses that make lots of money who want there team to be the best and they will pay whatever they want to make that happen. Winning makes it worth their investment.
And that is "fair market value" when a bunch of those guys around the country effectively engage in a bidding war.
A huge % of our society has this misplaced idea of altruism attached to free markets. Being for or against market forces is like being for or against laws of physics and nature. They aren't good or bad things we can support or oppose, they just are.