Quality or quantity

It seems that smaller PhD programs have difficult decisions to make between accepting quality students and providing a quality graduate education and accepting (and matriculating) a higher number of students in order generate more revenue for the university. When the latter occurs it becomes increasingly difficult to maintain the quality of the program because departmental funding must be distributed more thinly, or disproportionate number of PhD students go without funding. For those hoping to join the ranks of academia, they are placed in a difficult situation because they lack the pedagogical guidance some of their colleagues receive in terms of classroom preparation, designing courses, and writing lectures and tests. Instead of looking at their bottom line, more departments should limit the number of people admitted to their programs in order to ensure those accepted receive the highest quality education and preparation possible. If such a policy were followed not only would the glut of un-tenured PhDs diminish, but the institution's credibility rises as well. Furthermore, whether it is a good thing or a bad thing is a matter of opinion, smaller departments would be able to specialize to a higher degree the types of PhDs they turn out. For instance, if my current institution followed this logic, the focus would be on Public and American history with a major strength in urban history. Naturally there would be other problems that arise from this situation, notably difficulty retaining faculty in other fields who might be discontent not having graduate students to work with, but it seems like an interesting idea that might solve a number of the current problems in academia.