I'm not sure what to make of Simon Jenkins' recent article in the Guardian, in whch he accuses universities of being lazy, wasteful, addicted to public money, and resistant to any form of change or innovation. He is probably being more harsh than he really feels, in order to provoke a reaction in the comments contributed by readers, and any reader who takes his article at face value will find that the comments that follow are a useful antidote.
Let's take the article seriously for a moment, and consider whether there is any truth in the central charge that conservatism is the driving force behind academic life. Unreasonable resistance to change is so widespread that it would be amazing if universities were free of it. You only have to look at some of the reaction to Obama's health care reforms to verify this: the hysteria, fear and anger of the rhetoric against these highly incremental reforms is evidence of a psychological disability to cope with any form of change and innovation, one that affects tens of millions of Americans.
But there's another reason why universities might not make the changes that Jenkins urges, and that's Hotelling's Law. That is the observation that in a lot of competitive marketplaces, the rival providers (of goods or services) tend to position themselves very close to each other, rather than go for product differentiation. If one provider does decide to aim at a particular section of the market (say, lower-cost goods) then in order to do so, he just offers goods at a very slighter lower cost than his rivals: he does not consider his cost in isolation, but relative to the competition. (As an aside, I'm not sure that hotels obey Hotelling's law, but other things do, e.g. political parties.)
In an increasingly global marketplace for staff and students, universities are understandably reluctant to go to extremes in order to capture some segment of that market. Despite Jenkins' call for 2-year degrees and year-round teaching, even if there is indeed a big market for those things, universities should be reluctant to go there. British ones are already taking a fairly extreme position on short degree timescales (most countries have 4 or more years for first degrees). And they are, reluctantly, taking an extreme position on low levels of state support for their activities. They are already well into the danger zone and should go no further.