I get it - and at my stepdaughter's school there are co-ed dorms of different styles. But what they don't offer, and in this case is what the students hoped to achieve was "give us our own dorm with one bed", effectively.
The issue then also comes down to "well, college relationships aren't always the most durable things" - what happens when they break up? Who has to move out? It's not one person's space. Now the college is also on the hook for ensuring that there's sufficient vacancy (wasted) to handle these situations in other dorms.