Maybe for rural schools or colleges set in nice neighborhoods...but there are a lot of major universities located in areas that would not be very nice but for the presence of the school.
Look at schools like Columbia, UPenn, UChicago...They all border pretty rough neighborhoods. If the school wasn't there, the area where it sits would be a rough neighborhood too.
The private police forces keep a safety bubble for students. The local PD has many other things to worry about, while the university police (many of whom are just off-duty cops) can be 100% tasked with patrolling and maintaining student and neighborhood safety.
It also means that they aren't required to behave exactly the same way as cops are which can be of great benefit for a University that wants to take care of their students without policing them heavily. They can enforce non-law university rules, and they can choose not to enforce other actual laws as strictly as they might if they were on duty regular cops. For instance, I know that at my college, the university police were not big on busting people for underage drinking (obviously, there are other schools where this is the only thing they do...). They would still show up and bust rowdy parties when the neighbors complain, but they wouldn't pull out the breathalyzer and start checking IDs. Similarly, they might not enforce park closing times on a bunch of college kids playing frisbee at midnight, but they would still boot out non-students. Basically, the school pays them to keep kids safe, not to lock them down or hamper their fun--since they aren't the real police, they have a lot more leeway to profile people (e.g. kick you out of the park if nobody in your group can produce a student ID).