Money spent on Marketing is not money out the window. Without marketing, no one knows you're there, so you go out of business. This D+ campaign has a viral component to it - news media and message boards are spreading it for them, for free.
It is true that prospective students are bombarded by lots of marketing, so it's hard for one college to stand out from another college in the marketing arena. Marketing is pretty much gimmicky, designed to catch a person's attention, much like a barker trying to draw the attention of passers by to some restaurant, much like some guy in a plush dog costume outside of a pizza joint, holding a sign and waving to the cars driving by. If a customer gets the message from the guy in the dog costume that the pizza joint uses dog meat, then that customer is probably reading too much into the marketing message. Likewise, if a prospective student, or anyone in the world for that matter, equates Drake with sub-par academic performance because of the D+ message, then those people are probably relying a little too much on the marketing message. Is this going to keep you from getting hired into some job in the future? Some employer is going to look at your resume, and think "oh, this guy is from that D+ university." Well so much the better - because that's the kind of employer someone with a college degree is probably seeking to avoid in the first place. Likewise, that's the kind of student that colleges are better off avoiding in the first place -- the student who emphasizes form over substance.
This message of criticism of this D+ marketing campaign really evokes what Fareed Zakaria was talking about here:
Fareed Zakaria Criticizes Media Attention On Obama Oil Spill Emotion -- Sorry I forgot which touamb user originally posted this clip, and I can't seem to find the original post via searching.