Less universities is an exceptional idea, but the criteria for closing them down you've suggested is horrendous.
It's true we have too many students, and it's true we have too many degrees that are costing taxpayer money and not leading to taxpayer benefit through better employment options for students.
This isn't the fault of students.
This is the fault of years of government propaganda and policy. For years, we've been told that we have to go to university. For years, we've been told that if we don't, we'll end up unemployed or earn so much less. This has lead to too many people going to university and a devaluation of the degree.
A lot of these people are doing courses that give little taxpayer benefit, too - humanities and social science courses mostly. We have a lack of physicists and an abundance of literature graduates, for example.
Alongside this, there has been a massive devaluation of 'vocational' courses. People think that these courses are beneath them. Why? Because there is so much emphasis on academic intelligence and not enough on practical intelligence.
A good plumber, electrician, builder, joiner, metalworker etc can make bloody good money running their own business or working for a company. Yet, a BTEC in Electrical Engineering or Plumbing is seen as a 'thick' route - it's obviously much cleverer to go to your local polytechnic and do a course that gives you absolutely no job skills.
This is of course, rather hypocritical of me, given my degree. I know there is little to no need for my degree in the job market. My degree won't get me a job unless it's a job based on social research or relations, and given that those jobs - in this economic climate - are rarely than rocking horse sh*te, I don't see one coming my way.
So yes, we should shut some universities down. We should shut some courses down, but not on the criteria you specify. League tables are pointless. League tables are useless. The mark of a good university is quality teaching and quality research output, not student satisfaction or percentage of graduates who complete their course.