This article, in a nutshell, argues that the percent of a university's budget spent on faculty salaries = percentage dedicated to education, and it's too low.
1) First, faculty salaries are not the only component of higher education costs that go directly toward educating students. We can argue, for sure, about lots of university expenses. But a science program that doesn't spend some money on beakers or a humanities program without library books would not provide what most people consider a satisfactory education.
2) There are costs that don't go directly to education that I don't have an issue with, and I don't think most people do. There are colleges in Minnesota. I think students and faculty alike have a right to be sheltered from the winter snows during the educational process. Therefore, I'm okay with building a classroom instead of making students stand around in the frigid Northern equivalent of an agora.
3) It's always hard to quantify, but students and student affairs professional tend to argue that extracurriculars as well as a residential campus environment increase student learning outside the classroom. I am certain that I would have had real trouble finding a job after graduating with an English and history major if it weren't for my experience on the student newspaper. Number of faculty involved? Zero. But you can't convince me it wasn't educational.
I'm not sure the author of the original post would even argue with these point (at least one and two). The conclusion: "The point being made here is that the ostensible principal raison d'etre of most universities—the education of our youth—is really a small part of university activities," but this conclusion is reached on the basis of faculty salaries. Well, yes and no. I think faculty salaries are a pretty inaccurate tool for estimating the cost of educating our youth for all of the above reasons.
(And a quick reminder to non-industry people that this argument is really only about universities - not colleges or community colleges, which have very different budget profiles, and may not even focus on youth.)
That being said, I would agree that it's hard to look at Harvard and believe that its main purpose is to educate kids - but where I'd take issue here is that educating kids is Harvard's "ostensible raison d'etre." I think Harvard is pretty up-front about the fact that "generating world-class research" is an equally major component of its mission. If that's the issue - and it seems to be, given the author's digs at the "100th article" on an obscure topic in an obscure journal - and if you think the mission is inappropriate, don't distract us with all these red herrings about costs not reflecting the mission, where costs are poorly estimated.