Of course, they could reinstate the team and just not have it be a scholarship program. You would have players come in and pay their own way or be able to qualify for scholarshiping thru academic means or grants. You know, the old fashioned way...it's not un-heard of...with hard work and the BIG10+ budget and some creativity they should be able to compete after a little while with MOST teams.
Yes, I think this would be a great idea. They wouldn't compete well with those that give scholarships for tennis, but since there are getting to be so few of them, they could essentially have two divisions - one with and one without scholarships. There are still significant costs in terms of travel, facilities, coaches, etc. that the school would have to pony up for. Still, lots of kids would still jump at the chance to play high-level college tennis, and if the coaching were good and other conditions were right, might choose to even go there over a place where they could get a partial scholarship - and tennis has the advantage over some sports in that the kids are often very good academically.