All of those factors have played into the increase. It isn't just during down economic periods. For man reasons, people here in the US have got it drilled into their heads that they must get a degree. Or rather, the older generation got it in their heads that their children must get a degree. I don't agree with this idea at all. Some people simply aren't college material. I really wasn't, but I went anyway and ended up taking 10 years to actually earn a degree in a field in which I have never worked.
When I went back to get a degree in something I was interested in, it was at a local community college in a technical program, not a university setting. Truthfully, had such a program been available when I first graduated high school, I never would have gone to a university. I work in IT, and I routinely see jobs such as help desk or desktop support that require a degree in Computer Science or a related field. Really? That is some serious de-valuing of a degree there.
I take your point completely, and this also happened in parts of Europe, such as Ireland, where I come from. Part of the reason for this, I suspect, is that education was seen as a means of social mobility, and access to better conditions and employment opportunities, especially in poor societies, or in socially fairly rigid ones.
Precisely because education was a means of social mobility (and thus conferred increased status), the very idea of learning (and not just the qualifications) as well as those who worked in it, were accorded considerable respect and status in their respective communities (think of the 'respect' accorded to the schoolmaster, or school ma'm in traditional western societies). And, in turn, this meant that for quite some time, teaching and schooling attracted the ambitious poor.
Indeed, this is why reforms enabling access to education for those hitherto denied it (women, African-Americans, Catholics in Northern Ireland, to name but a few) have often had, almost literally, explosive and revolutionary consequences in some societies, and why, to this day, denying certain groups access to learning and education is so controversial an issue (think of the Taliban for a recent example).
However, your point that college may not be for everyone is perfectly valid. Yet, it can still be quite difficult for people to achieve social mobility, career satisfaction and respect unless they have access to higher education, which tells you more than is good for anyone's peace of mind just what is valued by our societies.
Obviously, societies need to address their priorities, and ask how rewarding career paths can occur in the absence of traditional vocational training (and the old apprenticeship systems) and without the necessity of acquiring university degrees.
For now, college degrees offer a ladder to a better life, which is why most people feel the need to have them. I readily grant it is a long way from Cardinal Newman's idea of a university, or the ideal of disinterested learning, but there you are. I may regret the passing of some of this (and I suppose I do) but that is life. Things change and we have to learn to live with it.
Cheers