Think tanks, unlike universities, are supposed to influence public policy, not to produce knowledge for its own sake.
This discussion started with Daniel Drezner, and continued in other places. You might catch up by reading Tyler's post and working backward.
Let me start with an emotional reaction. I am sure that Paul Krugman and Brad DeLong would like to see think tanks shut down. It would mean less dissent from their version of intellectual virtue and purity.
I'm also not convinced that university research is all it's cracked up to be. I see an increasing trend toward important books being written by non-academics, including Postrel. See this list, which I chose based on their importance and relevance. It includes some books by academics, but also some books by others.
I think that in the case of economics, the academy has been more or less hijacked by mathematicians who want economics to masquerade as engineering. There are signs that their influence is waning--recent recipients of the Clark medals might be an encouraging indicator--but they still control the curriculum at the top Ph.D programs.
At a personal level, I believe very strongly that the many years I spent out of academia do not make me a weaker economist. On the contrary, I believe that I have acquired a ground-level perspective that has enhanced my understanding of the economy.
My bottom line is that I believe that research, policy papers, and op-eds can be judged on their merits. I take strong exception to any attempt to automatically qualify a piece of work as superior just because it came from a university. If I come across an interesting finding on a topic outside of my area of expertise, I want to see other experts discuss the research behind the finding--not give me ad hominem arguments about the author and his or her institutional affiliation.