Remove the nice dorms, cafeteria, and fitness centers. Remove the community outreach programs that isn't really the job of a university. And yes increase the number of introductory level classes taught by graduate students and post docs.
I'm not worried about people moving from academia to industry. My hope is as we increase the rate at which people finish high school and go to college, we will have enough people for industry and academia. It is tempting to say we need to offer better wages and benefits for teachers but we can't digress. Cost containment should be our first priority.
I think it is possible if we understand and agree with the compromises we will need to make.