I agree with regard to companies, but I think it's a bit less clear for a university in general. Yes, the faculty and staff are clearly employees and so in a that sense it's reasonable to expect their internet usage will be monitored. But on the flip side, one of the historical aspects of universities is supposedly intellectual freedom. And in the sense that faculty might feel a chilling effect on their intellectual freedom if they know or suspect everything this type of monitoring, monitoring might be less acceptable.
When it comes to students, this argument is perhaps less clear. The students are not employees. Yes it's true they have all clicked "I Agree" to the university's network terms of service (but with all TOS's, how many of them actually read it?). But again, universities are ostensibly havens for intellectual freedom; what would pervasive monitoring do to that?
So, I think you are technically and legally correct, but I wonder if that justification is in the long-term best interests of universities as institutions of learning and exploration.