At some point though, you definitely want the teachers to be experts. This may not be true for most undergraduate curricula, true, but are not most undergraduate courses already taught by graduate students, lecturers and adjunct faculty? At the graduate level, you really want people who are active participants in their fields-- and this is probably true for the arts as well as the sciences.
I guess what i am saying is this: if all research moves to national labs and private institutes you will discover graduate education migrating there as well.
I guess what i am saying is this: if all research moves to national labs and private institutes you will discover graduate education migrating there as well.