Georgia Institute of Technology professor Mark Guzdial
The American University system is increasingly turning toward research and away from teaching. The result is higher costs, and we can get quality education without the research programs.
As always, I enjoyed Mark Guzdial's insightful blog entry, and was happy to see Harvey Mudd College mentioned (since I am on faculty there). As Mark points out, there are many fine undergraduate institutions that, collectively, are disproportionate producers of students who go on to pursue Ph.D.'s in computer science.
It's worth noting that these colleges have small (by R1 standards) but healthy research programs - often externally funded - and those programs are critically important in providing undergraduates with opportunities to participate in real research year-round, publish with faculty mentors, attend research conferences, take small advanced topics courses, and generally have a "microcosm graduate experience."
At Harvey Mudd, every one of our nine faculty members is doing research, with undergraduates, supported by the National Science Foundation, HHMI, and DARPA. And, similar levels of activity are found at other strong liberal arts colleges, particularly those that are part of the graduate school pipeline.
So, in answer to Mark's good and provocative question "Do we need research in our undergraduate institutions?" my strong sense is that the answer is "Yes!" They need not (and cannot) be large research programs, but without active research this part of the pipeline will shrivel and dry.
Excellent point -- research can be smaller scale, in support of undergraduate learning, without the extensive and expensive infrastructure necessary for large scale efforts. The smaller scale may have a large impact on PhD supply later.