If half-century old past performance matters, State College's stub end made for unpopular passenger service and football traffic never materialized either.
Well, the football traffic would be about 7 home games each year. That's much better suited to excursion-type service. You'd think someone would put together a train-to-game charter package from Philly and Pittsburgh, but that's a different discussion.
MegaBus offers a fairly aggressive schedule out of State College with frequent service to Harrisburg, Philly, Pittsburgh, New York and beyond. While it would be nice if there was train service to State College, it would seem as though the barriers are fairly high, with viable alternatives in place for the target demographic of college students. [Don't forget there's commercial air service to several hubs, too, for people that don't want to ride the bus.]
If PA really thought there was demand, there would be Thruway service from State College to Harrisburg connecting to Keystone trains. I'm guessing they've done the math and decided the demand just isn't there, despite the high on-campus population.