I first heard about "customers" in the university in about 1990 when the new provost at the University of Michigan, formerly the dean of the school of business, spoke of students as customers. The University of Michigan had been substantially defunded by the state, since the state itself was in dire straits. Suddenly, students were paying tuition comparable to that of private universities, at least if they came from out of state. Many of the provost's ideas were good ones.
Recently, one of my students wrote me (see the entry on memos you should not send) to the effect that my authority was balanced by his paying tuition and he being a customer with rights. At the same time, he wanted the authority of the university degree he was working on, something that presumably you could not buy--paying tuition does not guarantee that you are worthy. To be worthy is in the end your performance, a performance to be judged by the authorities, presumably your teachers who have been chosen by the institution.
Students and their parents or supporters are right to demand a safe campus, good teaching, and adequate facilities. And they might well ask for more demanding courses and outputs such as being able to write good prose. They may have definite ideas about curriculum and courses, but they are unlikely to be experts on such, and they are no more likely to know what to ask for from the faculty than they are likely know what to ask for from their surgeon. At some point, they ought go elsewhere if the authority of the faculty is not probative for them.