Is it really at expense of universities? From what I understand, most are getting Master Degrees but very few are doing research. I've seen plenty of H-1B coworkers with Master Degrees but very few did research, it was just extra computer science courses.

Majority of CS/EE/MBA type grad programs across all universities are heavily enrolled by foreign students. Most of them end up paying out of state fee.

This is a significant chunk of revenue for many colleges to keep their budget in shape.

Even in conservative states, lots of colleges are reliant on this stream of income. A loss of this stream is going to put a strain on them to balance their budget, or seek more help from govt.