On the one hand, it seems like "no" - hence some universities like Caltech choose to remain small, while others like Boston University & MIT don't merge into a single super-university in spite of having campuses that are side-by-side.
On the other hand, I don't see why it wouldn't apply. There should be an advantage to pooling resources, e.g. with library subscriptions, campus transport, and so on. At the academic level, more students/faculty would also allow the university to teach more specialized subjects.
Does economy of scale apply to universities? If yes, why are Caltech, Boston University/MIT etc (and Imperial/UCL for that matter) making the decisions they do? If not, why not?