I think it's worth it if you're smart about it.
I was very, very fortunate to get full scholarship for my undergrad education at my first choice school. However, when I decided to go to graduate school, cost definitely became a deciding factor. I ended up going to an in-state public university for grad school, even though it wasn't as highly ranked as other options. I couldn't justify the loans I would need to take out for a more expensive school.
I think loans are totally worth it as long as a) you are diligent about completing your degree and b) you are smart about which school you attend. I think that the cost of many small private schools are ridiculous. In NC, there is a private college on every corner that costs an arm and a leg...and they aren't even good schools.
I can't imagine sitting on 100k in loans to go to John Doe College for undergrad...especially when there are SIXTEEN public universities in the state (most of which are more highly ranked and all of which are definitely more affordable).