This is the exact opposite of the very argument publishers are currently using to argue that Open Access (OA) can never truly replace the traditional scholarly publishing process since it fails to sustainably provide all the competitive benefits that publishers have been providing for centuries, not to mention all the digital services available now. If the publishing model that we are using now, i.e. anything in the industry except for OA, provides so much unique value (such as their contributions in editing, managing peer review, filtering, etc.) then how can you argue, at the same time, that a few professors posting longer-than-typical excepts online for free on functionless web pages are substantial competition?
I'm not arguing that we should all have the right to post whatever we want, however much we want. It's just that the publishers' argument in this case is a little silly. They don't need to make an argument for why it shouldn't be allowed. The law already doesn't allow it. And we all know why the law is there. (Of course the issue involves the quantity allowed through US fair use which is a little vague but still, the point is that there IS a line that should not be crossed though it may be difficult to find the line.)