I think it still goes back to what the purpose of higher education is--is it to educate undergraduates, or to make money and prestige for the school, or is there a balance between teaching and research? The deal with public universities is that they want to be able to offer everything that private universities have (in terms of quality of life), but where they should be competing is in educational value: how much you know when you leave, how confident you are in the job market, and how innovative you can be to solve the world's problems. This means competing with private schools by having smaller classes, having faculty spend more time teaching and less time researching, and imparting to the students a sense that they are there to a) learn how to learn and b) use those learning skills to develop some degree of expertise in a particular field, NOT that they are there just to get a diploma. Unfortunately, when public universities are the cheapest available (for good reason, they are there to educate the public), they attract people who would rather buy a degree with the least amount of effort possible.
I don't think higher ed is that far gone, but I think some schools have lost the balance between education, research (as a fundraising tool) and sports (as an advertising tool*). This professor seems to be saying that his or her research is more important than educating his or her students (by whinging over lost offices etc.). It's granted that to teach you need a place to work and materials with which to create your lessons, but I get the sense that he or she is saying that "because I don't get to do my research, I don't really care about teaching now," which confounds the rest of the argument that higher ed is being left behind in North Dakota.