I have been out of college for over a dozen years now, so maybe things have changed...but I knew more than a few smart kids from CA, TX, and the NE. Were there rich kids that CU was just taking money from - sure, but I really don't think our reputation is a safety school. We may be a notch lower than UNC, Michigan, Washington, and other top public universities, but we're still highly regarded. And if CU is truly a top flight university, then we're going to be national if not international, not just regional.
But none of that matters when talking about where to go with our football team. We need to schedule wisely as many have pointed out. Playing WY and the like will do nothing for our football team and absolutely has no bearing on our academic status. It can help reinforce the local identity you want, but I don't think that's as important as doing what's best for the football team. "Selling out" is a strong term...we're scheduling football opponents for the betterment of the football team...I'm not saying your desire for local identity is stupid, but I'd rather our prestige grow, which is contrary to staying local.
Great points by many - for what it's worth...a personal reason I do NOT want to go to Missoula or play NDSU and the like...is damn right I'm scared of those programs. I'm more scared of top notch FCS schools than CSU.