Not to mention that it would blow an epic hole in government budgets each year, which I reckon could be distributed to better places. At least we have it better than those who go to uni in the US - now THAT's expensive.
I reckon free university would just result in people sticking around in uni for longer, either just doing more degrees or not being so worried about flunking a subject anymore...probably a good thing that there is some financial responsibility attached to going to tertiary education. For those who work hard at it and make use of their degree, it's still one of the best "investments" you can have (a much better return than most financial securities, that's for sure!)