One thing spending several years in Canada taught me is that education is an area in which the issues differ much more than one would expect, and that therefore one must be cautious about cross-comparisons. This is especially true with how education funding is viewed from nation to nation. Much of this problem is, I think, a purely British one: the proposal would barely be noticed in the United States, I think, because it's pretty much an American approach with some British modifications, and while Canadians might talk about selling out, I'm not sure that they would take it quite so personally as the British seem to take it -- some people are talking about boycotting all the academics involved. Setting aside the fact that academic boycotts are usually useless and ill-conceived even when they can be organized properly, it at least tells you how seriously people are taking it. Or if you're less interested in serious than in passionate, you could look at comments to the Guardian's article on the project.
I confess, though, that even trying to compensate for cultural differences I see very little more than a teapot tempest here. The basic points of Grayling's defense of the model -- there needs to be a more sustainable model for humanities education, this sustainable model is unlikely to arise if one attempts to hang its sustainability on government funding, the high cost will be offset in many cases by scholarships and bursaries, the rest will allow for educational innovation and experimentation that could benefit humanities education generally by serving as a model for less expensive programs later -- are all entirely good points. To be sure, it would be a bad thing to do all or most of one's educational system along these lines, but there's a great deal to be said for trying things out, and trying things out in education is expensive, which is one reason why government dependence (which is not a bottomless purse, and tends to restrict programs to basics with criteria for success that are easy to identify in the short term) tends to choke out innovation unless you take steps to compensate. And the arguments to the contrary are mostly not convincing unless you think it obvious that everything will eventually go this way, which, given Britain's educational culture, seems unlikely. The only one that I think has any bite is that this project is heavily piggybacking on public education resources; but I know for a fact that the British do this sort of thing to foreign students all the time, and that seems to me to make the argument run dangerously close to hypocrisy.
The real question is whether this model really can be made sustainable in Britain; in the U.S. it would at least have a chance of succeeding, if it got philanthropic support (which it likely would), but in a nation in which the very idea of it results in a palpable distaste, I'm not sure that this is really going to be forthcoming. Looking at the roster, I'm also not actually sure that this is the group that could manage it if it could be made to succeed; they are mostly senior academics with a lot on their plates already, and unlikely to make, or even to be able to make, the long-term and intensive commitment it would require.
But, again, talk about education across national borders is harder than most people realize; there are always many subtle differences that make for big differences elsewhere; what works here does not always work there, and what people expect, of course, has an effect and differs widely from place to place.