If we could charge users just a little bit of money [...] But we can't, because we're an academic institution. So that would be evil.

I doubt very much that the people who made this decision were considering the moral implications. Far more likely, they decided based on economics. It sounds like a good decision to me, from what you've presented here.

I really don't think it's appropriate to equate a business decision with religious craziness, not without more evidence that they're behaving irrationally.