As TPM pointed out, after the restrictive transfer rules were enacted, graduation rates rose. Why would you go back to an era where graduation rates were lower?
Nothing prohibits an athlete from transferring; just that a recruited player going from D1 to D1 has to sit a year.
But under certain circumstances - as illustrated by Alabama - a new coach can make a serene college career blowup, and the player has no recourse. Recently, one of the Weicsz triplet's filed an action against the NCAA's sit out rule based upon coaching changes. He lost - but the case hasn't (didn't) go far enough to draw any conclusions as to how courts would finally rule.
The problem of taking the NCAA to court is twofold: time and money. Courts are not really designed to reach a final determination rapidly, so by the time the 19 year old player would get a favorable final ruling (maybe, if) would be about five years after he graduates from college. And, of course, who funds the case against the deep pocketed NCAA. (In the Weiscz case, where the court granted the kid the right to play via a TRO, the school decided to sit the kid - because if the TRO was dissolved or did not ripen into a PI or permanent injunction, all games would have been forfeited.)
It's a delicate balancing act: trying to get kids graduating (to keep off public and government pressure) close to on time (on the one hand) and allowing free transfers JUST to play baseball (academics and future be damned) (on the other hand).