There are many other great schools.
PSU main campus is easily among the top schools in Pennsylvania, even the best (with the exception of the University of Pennsylvania), depending on the ranking. It's actually one of the better/best schools in the world. Nothing in the state university system even compares, and among the other state related schools you have Lincoln (which really again doesn't compare), Temple and the University of Pittsburgh. Tuition at Temple main is about $10,000 more a year, it's a much lower... ranked... school and it's in the ghetto in Philadelphia. Pitt is a great school but again it's in Pittsburgh, while PSU is in a completely different environment all together, although they cost around the same and are ranked similarly generally.
None of the other state-related schools have anything close to the large system of branch campuses that PSU has, which is a lot of what makes it such an important institution in Pennsylvania (many of my friends are attending Penn State Harrisburg which is a very good school with great engineering programs), and there are no other medical schools or university hospitals here in the Harrisburg/mid-state area beside Penn State Hershey.
If you removed Penn State from the equation of higher education in PA... well, you just can't. It would be catastrophic.
PSU is much bigger than Sandusky, JoePa or its football program, and, while this may be tough to swallow for people who depend on impulse and emotion to make decisions about things, its health and ability to serve tens on tens of thousands of people is leaps and bounds more important than getting petty revenge for the emotional health of 48 people.