"Free market" budgeting in higher education?

A lot of higher education institutions have been experimenting with cost-center budgeting in which each individual unit gets to keep a certain percentage of any revenue generated but also is responsible for making cuts if revenue from that area declines. Here's a recent example at the University of Cincinnati.

http://www.insidehighered.com/news/2008/11/11/cincinnati

As someone who has pushed for exactly these sorts of measures at JBU, I can certainly relate to the kinds of conversations these efforts are generating. We so far have decided to do this kind of work only on the margins (our ancillary budget process and our Grad budgeting "boat"), in large part because our units are not autonomous in which the academic unit responsible for cost would also be responsible for revenue generation. Those efforts are separate (academics and admissions), so if academics can only partner with (not run) the revenue generation side, it doesn't make much sense to have them fully responsible for the cost side as well.