Sounds to me like a reflection on the misplaced priorities of a dumb, past-it society.
A society of people no longer able to exert sufficient self discipline to attend to the necessary ahead of the self indulgent.
The sort of society whose social or collective consciousness and conscience is manifest in the Rudd woodchipping policy or Howard's persecution of Dr Haneef.
More footy stadiums- yes. More universities- no. More four-wheel drives, plassies and plastic surgery- yes. More mental effort for creativity or to discern life beyond one's own narrow self absorption- no.
Latrobe in trouble is an example of a society no longer willing or able to order priorities on a rational basis.

being fearless, i'll offer an opinion in an area i have little knowledge of, and not much more interest:

specialization is the only way for small institutions to compete with large unis.

i did time at a engineering college with an intake of 20 students. they're still in business 40 years later, not much larger, and live on being the best in a narrow field.

giving everyone who comes a degree in 'life experience' only works in a whitlam society.

Paul,
this is increasingly the implication for universities in a deregulated market society.

We are see new divides being developed between successful ones such as Melbourne or Sydney uni and the smaller ones such as La Trobe. The income is not coming in from students because they do not have the market status.

Many would say its a management problem at LA Trobe. It lost its way etc. Maybe--that was certainly the case at RMIT.

But the states need to put more resources into their universities if they want them to be centres of knowledge and innovation.

Al,
go for it. Here's an upbeat account by Geoff Gallop, a former premier (of WA) and friend of Tony Blair. He says:

The states are particularly well placed to provide strategic and targeted support for research and to facilitate networks between universities and industry. Such networks are essential if knowledge is to be incorporated into the production of goods and services.That regional governments are well suited to play this role was recognised in the 2001 Organisation for Economic Co-operation and Development report, Cities and Regions in the New Learning Economy.

He adds that it may seem ironic that the states would expand their role in higher education while under challenge from the commonwealth in primary and secondary education. In reality it is a recognition of the limitation of any one-size-fits-all model of national uniformity in a world that places such a high premium on innovation and the networks of trust and exchange required to facilitate it.

Gary
there is another divide opening up to the old one of research-intensive and teaching-intensive universities that is reaappearing.

We have the appearance of dual sector universities that also offer substantial student load in vocational education and training It is an emerging trend and may well include Ballarat, Central Queensland University, Charles Darwin, Edith Cowan, Southern Cross, Sunshine Coast, University of Western Sydney and Victoria University.

What we have in this divide students from high socioeconomic status backgrounds who attend expensive private schools are over-represented in the sandstone universities, while most students from poor backgrounds are streamed into recruiting universities which lead to lower-status occupations and lower-paying jobs.

La Trobe is a part of a group in the middle.

What happens to TAFE with the emergence of dual sector universities?

nan, i see no problem for tafe, they can continue to provide graduated training in one to three year courses carefully chosen to meet local demand.

vocational unis will differ in providing some theoretical underpinning, and specialize in areas that need 'plant': engineering, it, forestry, etc.

plenty of room for educational diversity, but getting the right mix of public, commercial, and private money will be a never-ending story.

Same old same old, the base premise isn't debated "teaching only universities are bad".

Tertiary education has moved on, research is now belong in a few very specialized places ( CSIRO comes to mind) with a larger group of tertiary schools needed to supply the education needed to run a modern economy. These needs are filled by degrees that allow students to enter professions and at a pinch masters. There is a limit to the number of phD graduates needed and training them as a university status symbols is a waste of resources and the degrees awarded are of limited use to the students that graduate.

Charles
It's a bit more complex that re your 'Same old same old, the base premise isn't debated "teaching only universities are bad"' comment.

The new vice-chancellor Paul Johnson, the former deputy director of the London School of Economics, who took over at La Trobe in April does say that:

Academics who do not publish regularly would take on a heavier teaching load to allow others more time for research.

But he also says that:

non-research academics could be promoted all the way to professor on the strength of their teaching alone.

However, the basic argument remains the research is better than teaching. It's more prestigious and brings in an extra income stream and attracts students.

Prestige is important in academic capitalism---just as it is cars. People desire prestige and status and so they will pay top dollar for it. The market is very status consciousness.

Not to mention that some of us want to keep doing both, of course.

Laura,
hmm, that sure makes life tough, if not stressful. I guess some universities will support this desire and love those of their academics trying to do both.