/* Disclaimer: I am in a fraternity. I am graduated at this point, but once you join, it is for life. Fraternities are not clubs.*/
The only reason I'm adding to the mess above is because, as best as I can tell, I'm the only one to comment on it that has had inside experience.
I'm going to begin with one of getzburg's comments. Hazing is not necessary. If you cannot get a group of people to bind without hazing them, you're a physican with leeches. My fraternity, Sigma Nu, happened to have been founded in 1869 against hazing. The other fraternity then at VMI was hazing cadets until they joined. The Founders, having been military men before entering VMI, recognized the difference between discipline and childishness. If you have to prove yourself to a group of people that says they want you, beyond proving the capabilities you claim to have, do they really want you? For that matter, if you can't bond with someone without torturing them, perhaps you weren't meant to bond with them?
Yes, to be honest, the average fraternity without other restrictions will be white-dominated. I can't really speak for other schools, though I will say the school I attended was, well, let's just say not subject to affirmative action. So, most of them were dominated by white and Asian students.
At good ol' KU, it was cheaper to live in a fraternity house than on-campus -- if you could find a spot on campus. Yes, you could find housing with other independents, but such housing was chaotic and somewhat irritating at best -- Flint, Michigan is not terribly cosmopolitan. So it actually cost less to live in a fraternity house.
Fraternities were formed to inculcate principles, such as love, truth, and honor. While many have strayed from that path, it is important to remember why these things were done. Fraternities were not formed to be elitist groups -- the original design was to find those who agreed with their principles. They weren't formed for the rich; they were formed for those who wanted to learn, the noders of their day.
I will add one negative aspect I have noticed (the writeup it was relevant to having been nuked): Houses bicker between themselves, tearing down the Greek System rather than building it up. My chapter is being forced to recolonize after a long battle that included vicious rumormongering. Some people realize the need to be interfraternal while in college, some people realize it afterwards, some people never get it. All the Greeks are in this together.