I just don't think that 500k is worth it for the hassle and potential liability for ISU. I was also this kid, and another beer was the last thing that I generally needed. However, if someone was selling it nearby, I was definitely going to buy it even it it cost $10.
I don't buy that selling beer inside JT will reduce the amount consumed as a whole. The kid sneaking a flask in is nearly impossible to stop, catch, or control so I think they're a different animal altogether. If they're sneaking it in they're going to drink/share that first and once that's gone they'll be #1 in line for the $8 beers.
I just think ISU can do better and once you open this box, you can't close it.