I work at a big national laboratory that is funded by the US government.
Sadly I don't have a good idea for a solution.
Given the number of papers written by just US government funded researchers, it seems that there would be sufficient numbers to easily fill up government funded journals in all the major research areas. (Phys, chem, geo, bio/med, psych/soc, and a bunch for engineering.) Since the govt holds the purse-strings, they can, with the stroke of a pen, require that all government funded research papers are published first in the official govt run journals. Publish those journals for free electronically, with paper copies at cost of materials/distribution. And scientists/depts/agencies/etc can then still distribute their own material as they see fit in addition.
Given the number of government funded researchers in the world, would expand nicely into best-of "International" versions of these journals. And universities should quickly opt in, especially when so much research in major universities comes from government funding, so will be bound by the new rule anyway. And once you've got all the world's government and university researchers... Elsevier and co are already dead.
["Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. Thus integument is burst asunder. The knell of capitalist private property sounds.
The expropriators are expropriated." - Das Capital]