No, individual academics don't subscribe to journals, the university libraries do. This will result in slightly more money for universities, slightly less money on grants for research.
> Certainly less ideal than circumventing publishers entirely, but hopefully a step forward.
Publishers are still useful, so I don't really see a reason to advocate circumventing them. Physicists have had the ArXiv for two decades, but that hasn't stopped them from publishing.
That way, you only have the expenditure if the research leads to published papers. If the research doesn't lead to papers, well, at least you're a few thousand better off. And of course the funding bodies would know exactly who published what when where, and they'd get the right details in the paper's acknowledgments every time.
As an alternative, if there was funding to publish only a limited number of papers that could reform the incentives that lead to "salami publication". Or perhaps it would lead to a worst-of-both-worlds where salami publication cost funding bodies a bunch of money. We shall see!