It's good to have a way to determine which colleges are better than others. Prospective students can make decisions about where to apply based upon rankings published in reputable magazines and newspapers. Also, the competition between colleges to get better rankings will improve the quality of their education and benefit the students.
How can a precise measurement of a college be made? It cannot. How can you measure the abstract characteristics of a university such as the student's interest in learning or the amount of real world preparation a student gets? Students should choose a certain college not because of it's ranking, but rather should choose to go to a school because they would love the learning environment. It is better for a student to choose a college that is appropriate for him intellectually rather than to choose a college due to its ranking.
College rankings mean nothing in the long run. The bottom line is that students will go where they can afford to get a degree. Sometimes that means a community college, other times that means a large, four-year institution. Rankings mean nothing because each college specializes in something and each place lacks some aspect of college life. No place is perfect, even a number one ranked university.