Due to some rather unnecessary rambling about PPP, etc., I failed miserably in getting my point across. So, what the hell was my point?
Most of our elite institutions (EIs) are publicly funded, a fact that constrains them from unilaterally deciding to increase faculty salaries (however desirable this course of action might be). What are these constraints? One is that faculty positions are essentially for life; dismissals for non-performance are rare. The second is pay parity with people in (regular) government service; bureaucrats will rebel at -- and derail -- attempts to disturb this carefully crafted 'equilibrium'. Finally, government just doesn't do differential pay structure (e.g., high fliers getting paid more, within the same scale).
Moreover, there's not much point in asking for an across-the-board salary increase. Why? Simply because there is a lot of non-performers in our system, and such a pay-raise would end up benefitting those as well.
Thus, under these circumstances, what we should aim for -- demand! -- is a situation where high performers are able to earn more through non-salary mechanisms. Consultancy is one such route, but it's not aligned 100 % with the goals of an academic institution.
Allowing faculty to earn money from their research grants would be far more preferable. It already happens in research grants from industry; I would like it to happen in grants from government agencies as well.