There are less corrupt reasons for liking the idea as well. A lot of Kevin's suggestions wouldn't be good ways to organize universities in general. But if we're talking about setting up just one unusual university, I'm much more sympathetic. This part, for example:
Nor would you sequester faculty members into departments organized around academic disciplines. The world can get by without one more English department or college of business. Gates's programs would cross traditional disciplines, organized around goals for what students need to learn. Faculty time, pay, and status would center on the primary teaching mission.There's a good reason for having a bunch of departments organized around academic disciplines. If you're hiring a philosophy professor, you need a bunch of philosophy professors to look at the CVs and read the writing samples and do the job interviews and pick the top candidates. And if you're going to hand out degrees in biology, you need some biologists to design the requirements for getting a degree. There's enough work of this kind that clustering teams of specialists together and giving each cluster its own collection of secretaries starts to make sense. That's basically what a department is.
But maybe there's some other way to do these things. Maybe you go out to groups of people working in the various professions and have them design the curricula for a degree program in their thing. And maybe you hire by piggybacking off of the laborious work done by other hiring committees and buy a list of other good universities' second choices. There are a lot of changes I wouldn't want made at my university, but which would be a lot less disruptive if tried by a new place that was structured around them. Maybe some of them would work out really well.
In general, most universities have enough in common that I'm pretty sure we're missing some opportunities to do things in a different and useful way.