As previously pointed out, with the new increases now being proposed to the Regents, student fees will soon be the single largest source of revenue for the University. This means that, for all practical purposes, the University of California is now officially a "hybrid" university, i.e., an institution that, as indicated (and in fact advocated) by Pres. Yudof already in 2002, combines aspects of both public and private universities.
It is therefore not too early to try to assess how successful the hybrid model appears to be. Well, we know where we are: faculty and staff are subject to furloughs (which for many are straight-out salary reductions), students are being hit with mid-year fee increases, unit 18 lecturers are being laid off, programs are being cut if not eliminated altogether, and all this while revenue-generating units at UC rather than being asked to help support the core mission of the University are largely spared (through furlough exchange programs or other gimmicks).
As it is becoming increasingly clear, the hybrid model is inherently unstable, and in fact there appears to be a "tipping point" that we have already reached: once most of the revenue for the University is obtained through student fees, a UC education becomes a private good, subject to market pressure and increasingly accordingly priced. The State then has fewer and fewer incentives to support higher education in California the way it originally did in virtue of its social fallout. At the same time, more and more students are priced out of a UC education, further eroding public support for UC. The result will be even lower State appropriations, which will lead to even higher fees, reinforcing the cycle.
With fees over $10,000 the total cost a family has to shoulder to send a student to the University of California is around $25,000 a year. It's true, as has been pointed out, that this is still a bargain compared to the privates, but we are already within sight of the cost of tuition at least at some privates. For that amount of money, students will expect an education experience that is not too dissimilar from that which can be obtained at a private institution: smaller classes, better facilities, etc. Hence an incentive to even steeper fee increases, which will lead to diminished State support.
The conclusion seems to be that there is no such thing as a hybrid university, at least not for very long.
Once we reach the tipping point (and we can discuss exactly where that is located), the pressure mounts for a full-blown privatization of those bits and pieces of the university that already look like a private institution. Since different campuses can undergo this process at different rates, this might well eventually lead to the break up of the University. Already, and perhaps understandably, Berkeley is doing all it can to mitigate the consequences of the budget crisis through a number of measures, at the same time looking for ways to pay for them (e.g., through increased out-of-state enrollment, which of course will lead to fewer State resources, reinforcing the privatization cycle).
It is quite possible that privatization is inevitable, and the model of the University of California as set out in the Master Plan is doomed. But it would have been nice to get here through some sort of public debate among the consitituencies of the University (students, their families, the faculty and staff, as well as UCOP, the Regents and the State). Instead, this process is being implemented form above, under the guise of adjusting to a "middle point" — the hybrid model — which cannot be an equilibrium for very long.