College football is, supposed to be anyway, an amateur sport. You usually only get 4 years of eligibility. Also these programs are in it to win, not serve the needs of NFL teams. They aren't going to play some #4 QB from your practice squad if they don't want to.
Except that XFL/USFL isn't 4th quarter preseason football. They are teams with rosters and game plans looking to win games. In fact there's more talent on any of these spring teams than most college teams.
As for the networks, they made the investment because they want programming. Spring football ratings were middle of the pack, depending on what channel and time of day, comparable to the most NHL, NBA golf or soccer matches.