Right, unfortunately the grant funding model is deeply embedded in university research. Some folks get some startup funds on hiring (usually for lab construction/setup), but the rest is dependent on outside resources via grants. There are a few exceptions, e.g. Janelia, NIH intramural, Allen Institute, but they are unfortunately rare.
I think the parent is suggesting that the grant-based model of funding research is itself flawed. There are many issues, so it could be related to how the grants are chosen/reviewed, funds are allocated, universities depend on them, careers of scientists are decided by them, etc.