They can fight, deal with some near-term pain, hope that he backs down (not a bad bet; see: the China tariffs), and bide their time for the next administration–he won’t be President forever!–or they can agree to operate under the thumb of an aspiring dictator, subject to his every whim, forced to “negotiate” away all of their values and independence.
Principles matter. Seeing institutions like Harvard stand by their principles is inspiring to others that might be inclined to cave. The University presidents’ letter followed Harvard’s decision to fight. Other institutions are making supportive statements. This is how civil society survives.