@Cycloptichorn,
Well the administrators of state universities are employees of the state and agents of its government. So the actions you described were taksn by the government of Texas.
Most states have two or three tiered university systems, and all involve continuing struggles over the proper role, size and cost of each.
I don't know the details of the situation you describe and don't have an opinion about it. However, I don't see where any abandonment of government regulation was involved at all. On ther contrary, this was a direct action of the government.