the member schools pay players through scholarships to play sports that bring in revenue to the schools. If there was complete unrestricted movement you would see likely a smaller pool than there is now of competitive and non-competitive teams. The few would get better, everyone else worse and the mass would see revenues fall along with interest from donation paying alumni.

No different than trade rules, salary caps, etc in pro sports leagues that restrict movement of players so as to give some chance at being competitive to all members of the league.