We had the "Picture Man" come to our larger events (the social hierarchy at my school is/was house parties<all-house mixers with a single sorority<4 or 5 chapter parties at 3rd party vendor - the Picture Man would only come to 4/5 house party events) . I was in school (2001-2005) right at the time things were transforming from what you described to more digital stuff. The contact sheets were definitely more common when I was a frosh than a senior, and I think now, most stuff is online. I know that the guys older than me used to buy a lot of the photos, but that was getting rarer by the time I was in school.
My little brother is in the chapter now, but he rarely ever leaves the primers to get to the 3rd party vendor site (he makes me ever so proud
) so I doubt he knows if this company still exists.