I think what they are upset about is the fact that this could have been done from home
I agree that the issue of money for halls is clouding everything but what I would say is this:
My first years want to be away from home, they are excited about that even if they are just meeting a few people and everything is different.
Second- students CAN go home and study online in most universities, we have a list of students who have 'reasons' (but you could just say there's a vulnerable parent, for example). I have about a third of students who are shielding/in isolation temporarily/stuck abroad and can't return or have actively chosen online study. It would piss me off too if I'd paid out for halls and then it was all online, however, if you want them back they are not (yet) prevented from traveling home and taking the course online. Two out of my students have done this and I'll support any others that want to do so.
Finally- the threat level changed in the middle of the first week! What do you want us to do? If we had announced back in June or July when everything was looking much better that there would be no face to face teaching, and that students should all stay home (and remember, just like with schools, many homes are not happy ones) then there would have been outrage. Blended learning was developed because we simply didn't know what would happen. We still don't know what the situation will be in a months' time! This week the threat level changed and a lot of unis got spooked and went completely online. It happened on a Tues evening. We had to change the timetables of our 25,000 students. In the middle of the week!
Honestly, I'm starting to feel like the teachers on the teacher thread. Whatever we do- face to face, blended, online, no-one is happy. We get it, no-one is happy, but actually there's still a lot of good learning and responsive teaching going on. I feel cautiously ok about the safety of the campus, but there are still Covid cases.
I don't think keeping a generation at home to save money, and sit in with their parents, is the right thing to do myself, had campuses not opened up, people would have been very angry. Like it or not, more students than ever have weighed up their options and decided that leaving home and coming to uni is the least worst option in a pandemic and we really are trying to do our best to accommodate them.