It’s difficult to support undergrad without good researchers and an accompanying grad school. Or rather, it is superficially possible, but in a couple generations (academic ones,
i.e. in a decade or two), as graduates of the school assume teaching positions, a kind of vicious circle of degeneration sets in where the curriculum discards connections to the actual state of the field and successive iterations of courses fossilize while working out more and more minuscule kinks of an ultimately flawed pedagogical approach, usually that of the “founders” who last had contact with actual science. (Nothing against those founders—most pedagogical approaches are flawed in one way or another—the wrong part is doubling down on those flaws.)
It’s a not uncommon (if also not universal) thing to happen to applied maths departments, especially those where mathematicians aren’t allowed or encouraged to do their own thing. Bad high school maths is essentially the ultimate endpoint of this process, see e.g. Quinn on the “revolution in mathematics” in the Notices of the AMS[1]. A more high-brow example is perhaps how no undergraduate physics major in a Russian university includes group theory(!)—because Landau thought it useless and annoying (he was not the only one among the greats to think so, though perhaps the last,—look up “Gruppenpest” for more), and that was when official university physics programs in Russia detached from actual research.
Unfortunately, the amount of places in the world doing fundamental maths, places diverse enough that you can stand in the hallway and find someone who can explain to you a subject far removed from your own (that’s essentially what counts as “world-class”), is perhaps a couple dozen, certainly not in the hundreds. As long as they exist at all, there’s hope that with enough cross-pollination the whole thing will not die out, but losing even a single one is literally, through these kinds of knock-on effects only visible over a period of a couple of decades, a blow to the collective knowledge of humanity.
(As a late-Soviet—early-Russian apocryphal story goes:
“Why are you not emigrating?”
“I have people to talk to here.”
[Ten years later]
“Why have you emigrated?”
“There was nobody left to talk to there.”)
[1]: http://www.ams.org/notices/201201/rtx120100031p.pdf