Best of luck to them. It's quite difficult to convince faculty to switch over from tools they are comfortable using -- especially porting over their existing lessons and modules. Focusing on the UI is definitely the right approach as Bb is clearly lacking in this space. Regardless, the LMS market is long overdue for a shake up.
On another note, many universities already run and contribute to the open source Sakai LMS. It's a Java-based LMS developed and maintained by a consortium of universities. A small to mid-size university can get it running very quickly as a pilot on 1 or 2 servers using Tomcat and MySQL. It's easy to customize and it integrates seamlessly with existing university portals via CAS. Throw in a SAN for user files and it's a very powerful, scalable and low-cost LMS option that is much more usable than Bb.
On another note, many universities already run and contribute to the open source Sakai LMS. It's a Java-based LMS developed and maintained by a consortium of universities. A small to mid-size university can get it running very quickly as a pilot on 1 or 2 servers using Tomcat and MySQL. It's easy to customize and it integrates seamlessly with existing university portals via CAS. Throw in a SAN for user files and it's a very powerful, scalable and low-cost LMS option that is much more usable than Bb.