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If they are the only dry house on campus, I could see how that can somewhat hurt recruitment. It seems, though, that the alumni view alcohol as the fraternity's main selling point. You can go to a bar to drink; the fraternity should be about business, for the most part. The dry policy was undoubtedly put into effect for a reason, so they may want to focus their energy on something else.
Interesting read, though.
ETA: Is the dry policy a national mandate by Phi Delt, or is this something that was imposed on this specific chapter?
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*does side bends and sit-ups*
*doesn't lose butt*
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