For pro sports, I absolutely agree with your statement about no profit = no revenue sharing, etc.
For college sports, because they are still student athletes (I know they are paid, but they are still students), I don't really think making a profit should be the determining factor. Otherwise, the only college sports would be FBS level football and a handful of men's college basketball teams.
To me, college sports are a business expense, but I think there is value in college sports that is just bigger than the bottom line. Even still, each school must determine which sports it can and is willing to cover. So, every school can't have everything...that's where the bottom line for an athletics department does matter.