Network World is running an article
today on a case coming before the D.C. Court of Appeals this week. The American Council on Education is suing the FCC over their ruling requiring all ISPs to allow the government provision to wiretap their connections.
The latest extension of that ruling extends to "facilities based Internet access providers" And since many universities have direct connections to the Internet, they can be considered ISPs.
So apart from the privacy vs. security issues (which one could debate either way), univiersities are equally frightened by the prospect of a very costly forced upgrade of their networks in order to facilitate the wiretapping.