The problem right now with college athletics (at least football and basketball) is that the schools found a cash cow and the pro leagues found a free farm league that produces top talent. Its a symbiotic relationship and neither one wants to rock the boat. There's a reason the NFL players have their own union after all.
Regarding your second question, West Nowhere State is an ant in an elephants world. There are plenty of D3 programs (that give no aid or preferred admission) that have football programs that lose hundreds of thousands of dollars per year. They'll keep doing it even if Alabama is able to pay their players above the table.
As far as under the table money, I'm not sure. I never saw nor heard about those things, and with the way athletes like to boast it would surprise me if they were all able to keep their mouths shut. I think its less money going to less athletes than people would like to think.