When you notice that the higher education system has too many different purposes, I guess it would be a good idea to stop thinking about it as an indivisible system where every university has to have a similar purpose. Maybe different colleges and universities should specialize in satisfying different purposes? Of course, even today some universities (at least to some extent) do that. However, maybe making it explicit which university is of which type would stop them trying (or pretending to try) to cover everything? In the best case scenario, those different types of universities and colleges would compete for prestige with other universities within the same type.