It was not worth to invest a few milions in custom (quite unlike typical) hardware and software?

Radio transmission delay is 3.2 ms. It required transmission of a few bytes (single data bit with "huge" security overhead).

956 km / 300 km/ms = 3.2 ms

http://www.mapcrow.info/Distance_between_Chicago_US_and_Washington_US.html
Kilometers: 955.76
https://en.wikipedia.org/wiki/Speed_of_light
  299,792,458 m/s

User2user encryption is important but it is not all. Some people may dislike idea NSA.gov(.us) registering even "communication patterns" (when, to whom, size). User2user encryption does not cover it.

"Communication patterns" with big supporting databases can "suggests" A LOT.

P.S. There would be no american revolution with NSA.gov.uk watching carefully ;-)

By my standards you ask WRONG question. The way you "crafted" the question severely limits "solution space". Do you want simply choose new local email monopoly? Anything worth truly to be called a University should choose "main email system" in "heterogeneous mix for ever". It makes supports for public standards crucial. If you want to be "locked in" then you do deserve the consequences.