It almost never makes sense to give away a substantial amount free tickets, but for whatever reason there is a huge contingent of our fan base hell bent on promoting free tickets for students so I'm pointing out the only time it can be defended. Tennessee giving away student tickets can be defended, Syracuse giving away tickets can't. It's actually pretty basic economics.
As Syracuse football declined, they tried reducing ticket prices to increase attendance. It didn't work, and it lead to a pricing structure that was totally out of whack. I used to have preferred seating but switched to the end zone, because the pricing difference was unacceptable. So the end zones having more fans than the sidelines at games actually illustrates exactly why playing games with ticket prices is a high risk, low reward option for the school.
Giving away free tickets for a product that's not in demand absolutely impacts the perception of your product and your revenues. Years ago I lived in Albany and would occasionally buy tickets to their AHL team. They started giving away tickets at Berkshire Bank locations, which influenced me in two ways - first, I stopped buying tickets because they were free. Second, I occasionally blew off games when I had tickets and something came up - because what did it matter, the tickets didn't cost me anything. The team stunk; giving away free tickets didn't increase the crowd - it just meant that the die-hands went for free now, and you still had 1,200 at the games. Just less revenue to show for it.
There is absolutely a cost to poor ticket pricing strategy.