although he would be paying more in fees than my DC as a net uk taxpayer it does somewhat stick in my throat that what we should actually be doing is offering our universities to our kids and only the excess places elsewhere.
All of the world's top universities take students from abroad: this is essential for creating a dynamic, vibrant environment, in which students can learn from others with different backgrounds, different experiences, different ways of thinking. Restricting to home only students would rapidly push our universities far down international league tables and cripple our children's chances of competing in an increasingly globalised economy. Countries such as France which have not taken foreign students/hired foreign staff at universities have seen their university sector collapse in prestige, and their economies have suffered immensely.
Unfortunately the choice of the UK tax payers is to not fund university education and research adequately, but even if universities were better funded it would still be essential to take students from all over the world. (And, moreover, to hire international staff, for exactly the same reasons.)
And please bear in mind that many international students are not from privileged backgrounds: my DP came from a village with no phone lines, no electricity, in which most people picked tobacco from the fields. He travelled 3 hours per day on a broken down bus to attend high school, studied in the city library after school as he could not buy books, and took the bus home late at night.
Finally, the 3 out of 4 home Oxbridge applicants who don't get in will have wonderful opportunities at other terrific UK universities. It's only within the UK that people consider Oxbridge to be so far above all our other world leading universities. But if students can't find any other option they like (bewildering as I would find this) then students can always re-apply next year with their results in hand.