This sounds great in theory, until you start looking at the actual things that overhead covers. Things like the cost of my office space, my lab space, electricity, heating, building maintenance, telephone, computer network, IT and tech support, the photocopier machine we share, my admin assistant that handles travel and purchases, the admins in my department that handle grant budgets and compliance (which quite frankly I don't want to personally deal with), and more.

I mentioned Chesterton's Fence in another post here, about really understanding a problem and why things are done in a certain way, before tearing everything down. I'd really encourage people to try to understand things better before jumping to conclusions, it's not all that different from the engineer's disease that often gets mentioned on HN.