Universities today make a significant sum of money out of licensing and commercializing research innovations, adding millions to university coffers. Remove the ability to protect university IP and that revenue stream dries up, and all that lost money would have to come from somewhere else.

On a related point, I'd spun out some technology from university research a few years back, and last year sold the resulting company. I can tell you that the resulting tax bills produced significantly more revenue for the government than their original expenditures on our project.