But Powell's prescription has a serious flaw:
The U.S. government could sign over the pink slip on Hubble to the foundation, which would then set about the task of raising money to keep it aloft. How? Donations certainly would figure in: a few bucks from private individuals, perhaps some corporate money. While the majority of the telescope's images could continue to be freely available to everyone, there could be user fees charged to those for whom particular pictures are taken, as, say, part of a research project. Grants have been written for far-less-worthy projects.
First of all, I think he misunderstands that, with the exception of calibration work, all of the images taken by the Hubble are done as part of research projects. There are a few collaborations, such as the Hubble Deep Field projects, which release the raw data almost immediately. But all of the rest of Hubble's observations are proprietary for 12 months (occasionally for other lengths of time).
Secondly, and more importantly, the idea of charging user fees would not work well at all. The reason is that when an astronomer has his HST observing proposal accepted by the Space Telescope Science Institute (which operates HST), Space Telescope pays him a research grant to analyze his data. There is no (or there would be extremely little) grant money out there that could be used for paying Space Telescope to use HST; rather, the grant money flows the other way.
All of the other observatories, whether they are space-based (like HST or Chandra) or ground-based (like the Keck or Gemini) work the same way. If they let you use the telescope, they pay you to analyze the data.
This is generally your year's salary, sometimes multiple years' salary. A number of astrophysicists (including a lot of "contractors" at NASA) are paid by nothing else but what their observing proposals bring in for them. For others who are professors (ahem!), they're paid to teach, so any any time they spend on research must again come out of grant money, which is paid by the observatories. A large research university might have some amount of start-up money to fund a professor's research until he can get a grant, but that's limited. For those who work for NASA itself (which might even be a minority at NASA's Goddard Space Flight Center, where I recently worked), with civil service jobs, charging user fees to them means it comes straight out of the government's pocket, anyway. And for those of us contractors who were pure researchers funded by agencies like the National Research Council and others, well again, the user fees are usually going to come out of the government's pocket. No savings to the taxpayer.
The idea of more private money going into astrophysics is one I'd like to see happen, but it would have to be set up to pay the astrophysicists, rather than to charge them.