To the Yale protestors (who were widely supported at UChicago) the entirety of university housing at Yale was meant to be a "safe space," so it was incumbent on the university to fire professors who voiced unwelcome opinions in that space.
To many of the people who are angry about this letter, "safe space" means a support-group-like room in a specific place at a specific time, which doesn't interfere with the rest of the university's operations.
I suspect it is the former which Dean Ellison meant to attack. I find it hard to believe that he's trying to shut down, for example, group therapy programs for LGBTQ youth offered by the psychology arm of the university's student health system. But I do appreciate him sending the message, "we're not going to fire professors because you don't like what they said."