I would be willing to go out on a limb and say that not ALL (or even most) of the money generated from sports, goes directly back into sports. If it did, then they would just be a pro sports team!
Also, as for exploiting college kids and free education. I would venture to say that a regular non athlete is getting a better education than an athlete...at least the ones with thier own jerseys for sale and are so crucial to thier teams success that thier tests are surely taken for them to insure eligibility!