I'm no Rutgers alum, but I totally agree with you guys.
However ... it all revolves around $$$$$. People murmur about converting the Dinky to bus because they (erroneously) believe it will save money. People are interested in developing the land at Princeton Junction because they think it will make money. Developing some kind of (sorely needed) light rail or dedicated BRT in the New Brunswick area would cost much money. If you want to be cynical, note that the people in New Brunswick and Rutgers in general have less money (and political clout) than the Princetonians. The New Brunswick redevelopment (J & J, Hyatt, those couple blocks of shops and restaurants near there) came in the '80s when no one was thinking of transit-oriented development -- city officials were doing anything to keep J & J around. Unfortunately, I suspect it will take some equally drastic threat before we'll see truly adequate transit there.
FWIW, I agree with the success of the food court (at least during lunch hours) but of course this is just driven by the offices (not mixed use). And I agree, a parking deck is probably neccesary at Princeton Junction. I think the waiting lists for monthly parking run years on end. But I think here is where NIMBYism will rear its head. More parking means more traffic in and around the station. Perhaps adding the carrot of a nice "town center" is what is required to win the community approval.