I started to reply to a comment Jaya left the other day, but my response got out of control length-wise, and I figured it should be its own post. She wondered about the possibility that someday, colleges might relocate so that there would be more schools geographically proximate to each other, which would offer some obvious benefits.
I don't think so, for a few reasons.
One, of course, moving itself is enormously expensive. Long-term, a new location might be cheaper, but schools would have some difficulty getting the money together in the short term. Sufficient incentive may overcome this, but remember that after Katrina, the one thing none of the area colleges did was consider relocating, despite the virtual certainty the another flood will happen again someday. I do know of one school that is relocating in the near future, but from an urban area to a more suburban/rural one - getting farther from its neighbors, not closer. The cost barrier was overcome in this case because its present location is now primo real estate.
Two, most colleges are extremely regional. The best predictor of whether a student goes to college is how close he/she is to one, and the best predictor of which one a student goes to is again location. The subset of schools this is most true of are also the most penny-pinched. Elite schools with a national reach and the students that attend them are an unusual (and small) segment of the educational marketplace. Princeton, for example, is not tied to its region, but it also can afford to stay in New Jersey. Community colleges in particular exist to serve a particular community, not even an entire region. College-access advocates would have a fit if colleges were moved away from local constituents to where other schools already exist, leaving a pool of students without a nearby institution. Of course, one can easily debate the power your average educational pundit has!
Three, most politicians would be opposed to a college in their district relocating. State reps would object to moving their local colleges elsewhere, because they are a key producer of jobs and state revenue for the area. (Even those congressmen who aren't so keen on providing the funding.) Moreover, the cities that would receive the institutions wouldn't be happy, either. Cities that have a large concentration of nonprofits (including colleges) have been increasingly complaining about the reduction in property taxes that results. (PILOTs, or payments in lieu of taxes, are becoming more common.) A city that already has several institutions of higher education isn't likely to think that one more will be a major engine of economic growth.
Now, note that I don't believe all these arguments are socially good ones. I think the access argument is, but the one about costs is not - it's just a reflection of the way things tend to work, not how they ought to. There are considerable benefits to informal synergy and formal consortia; the model of the Claremont colleges ought to be more widely replicated, I believe.
The overall tone of this post is a big "no, not gonna happen," but that's not because I don't believe there are benefits to co-location. (I'm definitely anti-sprawl when we're talking about things other than education, after all). I'm going to save the benefits for a separate post, however.