Government as Mediating Structure

Just a quick response to Tom Berg's helpful post on the Solomon Amendment case: from the standpoint of subsidiarity, I'm not sure why there should be a different outcome afforded the public law school and private law school plaintiffs. Since we're talking about state law schools, isn't it vital that they be given the space to function as bodies that mediate between the citizens of a particular state and the federal government? If every government entity is equated with all other government entities, haven't we forsaken much of society's mediating capacity?

Rob