So, you're defense of undergraduate education at research universities includes "the lack of teaching that goes on at large research institutions"? I'm baffled that you think that is a defense. You were apparently not hurt (at least you don't think so) by the lack of teaching. Even if you are right, that doesn't mean the university didn't fail you, it only means that you were able to compensate for its inadequacies.
My point is not that research and education should be totally seperate. It is that research should be supported in itself, not at the expense of education (and make no mistake, that is the current arrangment). Education should be supported in itself, and not at the expense of research. The two are very different things that sometimes intersect. The current arrangement, at best, assumes that if research is encouraged, education will take care of itself. That isn't the case. Each requires a lot of work and they require very different skill sets.
By your own admission, teaching is short-changed at research institutions. that has been the case for so long that a good many people (you included) regard it as normal and acceptable. It may be normal, but it isn't acceptable.