I don't think that's a fair reading. I think it's reasonable to suggest that state governments ease up on the beauracracy in light of the decline in funding.
That report makes some interesting points about the increasing role of student loan debt covering the rise in tuition. They don't really suggest what universities should do though, it's more state-level reform: standardize admissions and credit transfer, bring primary and secondary education up to par... How do you propose getting costs under control?
Interestingly, the OP (the chronicle) states that the cut in state funding per student is 25% since 2000 vs 10% over 2003--2012 (citing dept of Ed). I wonder where the writer for the chronicle got their data? I still think the OP makes some valid points.
Increasing the # of students per class, increasing reliance on cheap adjuncts, reducing amenities, lowering pay/benefits, firing unneeded administrators. (Last one is a biggie.)
More generally, I could favor a plan which gives the universities "freedom". Specifically, we cap tuition + fees, eliminate most regulations on university behavior, and reduce funding. We should also make a policy that if there is significant student lobbying for more funding, the college president is fired. (That reduces the motivation to run a Washington Monument strategy [1].)
