I applaud Don Boudreaux for attempting to answer the question: “How do you justify working at a state university and holding libertarian views? That’s hypocritical!”:
Another consideration turns on the distinction between choosing rules and choosing how to act within a given set of rules. It would be a clearer case of unethical behavior on my part if I voted for further government involvement in higher education than if I simply accepted the reality of that involvement–a reality unlikely to be changed any time soon. I can legitimately say, “I would arrange education differently, but because that power is not mine, it’s okay for me to work for a government school even though I would prefer that such things not exist. I don’t make the rules.”
This argument, too, has some merit. But it also has a weakness: Society’s rules often are changed by persons who refuse on principle to accept what seems inevitable. “Playing by the rules” is not a free ticket to violate your ethical norms.
The bottom line is that I don’t believe that I violate my libertarian principles by working for GMU Econ, which happens to be a state institution (although one that also receives a good deal of private support). But I don’t think it’s unreasonable for anyone to question me strongly and skeptically on this matter.
My personal view is that economists who do so are not hypocrites. Rather they misunderstand are misinformed about their own preferences. That being said, I greatly admire Prof. Boudreaux for being so willing to ask if he's being hypocritical. Very few of us are capable of such level of introspection (and I count myself as someone who is not likely capable of it).
In economics we have the concept of revealed preference which states roughly that we need to understand preferences not by what people claim they are, but rather through the choices they make when a variety of options are available to them. Or as I have heard many times in my life "actions speak louder than words". Revealed preference tells us more than any blog post or essay could. It's what they taught me at the state financed school I graduated from.

Comments
This question, in my view, is really rhetoric and not analytic. Those who ask this are saying, “Shut up, you don’t have standing.” What they’re saying is nonsense, but it can be effective rhetoric. It is possible that failure to quit a position like Don Boudreaux’s shows lack of heroism (though probably not). The opposite of hero, however, is not hypocrite.
Should Walter Block cease his critical analysis of government-operated roads if he uses one of them to take a neighbor to an emergency room? Should anyone who is forced to pay for government schooling and selects to send their children to those schools rather than paying once more for private schooling, therefore, cease to criticize government schooling? Should anyone who accepts Social Security checks cease to point out the true nature of Social Security?
I disagree with Professor Moffatt’s assertion regarding revealed preference. We know much too little about the relevant constraints to reach any firm conclusion about underlying preferences. And we certainly don’t know enough, based on observed actions, to determine the worthiness of the actor’s motives.
Can you complete and explain this sentence:”Rather they misunderstand are misinformed about their own preferences.” Should there be an “and” in there?
What exactly is Boudreaux misunderstanding about his own preferences? That he really doesn’t want to work there? Or he shouldn’t want to work there?