Cathy Davidson has a thoughtful piece in response to the memo on the HASTAC blog. Part of what she says is
I think we have to distinguish between over-priced journals and journals that are "free." What are the costs of free? Who pays? As in all things, someone does. University presses are already severely undersubsidized relative to their costs and their importance to the machinery of higher education--teaching, tenure, and so forth. University presses are not for-profit publishing. University presses do not make money on publishing scholarly work.
Full text is here