That's pretty much the route Facebook took so it just might work but I too remain sceptical after mentioning G+ to a few people over coffee, beer or at the university and having to explain what I'm even talking about every single time.

that doesn't relate to the way Facebook took off AT ALL. The only "similarity" is .edu email addresses - in Facebook's case, it worked as an incentive because it was an exclusive club. Plus, it was an entirely different beast back then (and the "social network world" changed dramatically too)...

Without commenting on the validity of the argument, the point that you're missing (not your fault, the post wasn't clear) is that there will be separate ("siloed") G+ instances for these universities. The distinction will be the same as Googlers having access to both public and internal/corp G+.

One use case for this is that I can make a G+ event (e.g. a party) public, and know that only fellow students will see it.

Doesn't that also mean that all their data and connections will disappear after they leave the university? How easy is it to migrate the connections and data to a personal account?

If they lose their .edu address, then yes, it would mean that.

Don't want to stray too far off topic, but it is a reference to an episode of South Park [0]

[0] https://www.youtube.com/watch?v=tO5sxLapAts

Or perhaps South Park.