Removing art from academic institutions is analogous to removing research and development from Xerox or Mary from the Catholic church.
Higher education abstracts elements of human interaction with the world in order to examine and exercise in detail, and then reintegrate into the student's life. Art education exercises the vital element of bringing a creative impulse to fruition. In business, as in art, resources are mobilized around a vision to create a new reality.
Art can be justified empirically by noting the historical correlation between vibrant art and improvements in science, government, standard of living, etcetera. Art education can then be justified empirically by noting the historical connection between quantity of art education and incidences of great art.
My first justification speaks of the necessity for a long term (unknowable future) "artistic" vision, ala Xerox, in order to have a healthy economy. Art education contributes to this in the same way that business courses contribute to one's understanding of how to optimize business functions in the short term (knowable future). My second justification speaks of art education as being integral to the type of civilization we would desire to live in.
In my mind, the more fundamental need for art is on the spiritual level. In a country where the individual is increasingly isolated and deadened, art is a means of opening our souls to one another and to ourselves.