Having attended both a small university in the US and a large university in the UK for my undergraduate degree, and now studying/researching/teaching at a different large university in the UK during my postgraduate years, I've had some exposure to different styles of educational institutions, and experienced being on both sides of the desk.
One observation that has been increasingly on my mind is the nature of the dual teaching and researching responsibilities of academic staff at the larger universities. It is fairly standard that academics do both research and teaching as a part of their job description. However, almost without exception, every big-university professor I've met identifies more as a researcher than a teacher. Teaching becomes something that they appreciate the necessity of, much like committee meetings, but is often seen as just another job responsibility which must be done before they can get down to their "real" work -- research. This is a situation that appears to benefit neither the staff nor the students. To borrow an analogy from Mitch Hedberg, it is like asking that chefs also farm, and farmers also cook. Although their work shares the central element of food, requiring practitioners to both grow it and prepare it makes little sense. Similarly, researching and teaching revolve around knowledge, but generating new knowledge (research) and disseminating existing knowledge (teaching) rely on entirely different skill sets, and I cannot see why there is not more job specialization within academia. I've seen the current system produce a fair amount of both bad teaching and bad research by academics who are drawn more to the other component.
Of course, there are teaching-focused universities in the UK -- but they are generally considered a tier below the research universities. Why not have dedicated teaching staff teach most undergrad classes at all large universities? Allow the researchers to do more research, and have specially trained teachers do the actual teaching. It seems everyone would get a better deal: the students, the researchers, and those who love to teach, but do not wish to pursue research and grants. The current professors can continue to teach postgraduate classes -- this makes sense as most postgraduate work is heavily research based, and PGs are expected to learn for themselves from original source material.
These are just my recent thoughts -- there may be factors I've not yet thought of... can anyone give me a good reason why our current system is better?