At a research university, it would help get grants, a large chunk of which goes to the university via indirect costs. In practice, they expect the grants to flow on top of of these other minutiae often as unpaid overtime.
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.