They're perfectly fine negotiators. They just aren't negotiating for open access, but using the threat of defection to extract better terms from Elsevier. That is both rational and achieves, in part and indirectly, one of the open access movement's aims: to reduce the power of journals like Elsevier.
It's hard to imagine anyone at Elsevier falling for this bluff. They probably came in with a 40% increase knowing they'd only get 20%. After the letter, they drop the increase to 20%, then everyone claims victory and goes home.
But each round in which the OA card is played makes the bluff that much less credible.
Power and profits are closely entangled. UCLA is extracting better pricing from Elsevier's weakened position as result of open-access competition.
> it's hard to imagine anyone at Elsevier falling for this bluff
What makes you think it was a bluff? When one threatens defection, one doesn't want to defect. That's why the defection is initially threatened, not acted upon.
University should immediately back out of negotiations as what they desire(open access) would never be fulfilled by publisher whose sole mean of income relies on subscription costs and search for/or build an truly open access communication system. Entering into another long-term contract with Elsevier would further delay the much needed reforms in currently unsustainable scientific publication process.
As but one POI: open access also costs money, and Elsevier runs several open access or mixed journals.