Why is it "irksome"? Pretty much every administrator treats grants as revenue (i.e., department X brought in Y grant dollars last year). I wouldn't want to give someone a grant if half of it goes to fund the university's operations.
Because grants don't price in the actual cost of doing research. The cost of toner for the copy machine, and ethernet for the servers, and the electricity for the lights, and the grant administrators who will review the contract to make sure you're not playing shenanigans with IP, etc.
All of those support research, and none of them is a direct cost.
Companies just build those kinds of costs into what they charge. Universities don't, and then get screwed because people try to wiggle their way out of paying it. They're trying to get something at a discount, and then they're often rather sanctimonious about it.
At my university, by most figures, the indirect rate isn't even enough to cover the actual cost of research. It's just closer. What the company is asking is for the good people of $State to pick up the tab for the R&D they can't be bothered to do themselves.
My point is that universities have to choose. Grant money is either revenue or it's a way to cover the expense of doing research. It's hard for someone outside a university to understand how the system works.
Universities literally aren't allowed to mix direct and indirect funds for the primary source of their research money - the Federal government.
And Google is full of academics, funding academics, and being very careful about making clear these things are "gifts". They know full well how the system works.
Why is it "irksome"? Pretty much every administrator treats grants as revenue (i.e., department X brought in Y grant dollars last year). I wouldn't want to give someone a grant if half of it goes to fund the university's operations.