Full disclosure I’ve dealt with this all first hand. The vast majority of universities contribute next to nothing to research programs except the space, utilities, and IT. And those costs do not need to be a % of incoming grant money.
And the vast majority do just take that cut and use it as slush fund general revenue.
Our physics group had access to the shared LN2 tank. It was no fee, so if you needed a few liters you could just grab it. That could be replaced with a debit system which goes directly to the account. (Hmm, and who decides how much to charge?)
We got hazmat training, and the environmental safety officer was paid by the university through overhead. That could instead be billed directly to the grant. (Hmm, and who decides how much to charge, and how much training is needed?)
When we installed a projector on the ceiling we were able to get building services to install the mount through the air plenum. That service could instead be billed directly against the grant. (Hmm, and who decides how much to charge?)
We could book time in the sound studio to record voice-overs for one of our projects. That was free, but could be billed directly against the grant. (Hmm, and who decides how much to charge?)
Some relevant materials, believe it or not, are not yet digitized, but are available in the library stacks. I could just walk there and read it, because library support was part of the overhead, but you're right - it doesn't need to be that way. The library could charge per entry and book. (Hmm, and who decides how much to charge?)
I'm sure other departments have their own needs, like maintaining the herds for the ag school, or the instruments for the music department.
I don't know how you could have dealt with this all first hand and not see just how much more the university provides than "space, utilities, and IT."
I've dealt with this first hand because I'm a PI myself. I hate having to waste my valuable time dealing with the inventory person every couple months, but we do it because our funding sources require that kind of accountability.
Space, utilities and IT can be significant costs. There are also the standard costs of personnel for the people working under these grants (HR, Accounting, Purchasing, etc.) Add onto that the significant compliance requirements.
When the government hires a consultant, they usually pay 2-3x the salary of the consultant in per-hour costs. This rule limits them to 1.15x the salary of the employee.
See e.g. https://www.cogr.edu/sites/default/files/1991%20Excel%20Data...
