If we judged colleges by the same standards, I doubt they'd come off better. Normal colleges are fishing expeditions to land as many students as possible for as cheaply as possible and burden students with inescapable debt. Students have to pay even if they don't graduate or get a good job. 4-year graduation rates are below 50%. After 6 years, only 62% of college students have gotten a 4-year degree. The rest are stuck with debt that not even bankruptcy can forgive.

I don't know much about Lambda School, but my guess is that it does what colleges do, but faster and with incentives better aligned. College is more about distinguishing people than training them. (If education is actually about training, then why is >60% of the wage benefit of education from the credential rather than the years or credits earned?[1]) Someone with a college degree has shown they are reasonably intelligent and can obey instructions to complete boring tasks over long periods of time. This means they're probably a useful employee. I think Lambda School (and similar outfits) distinguish people more quickly than college and try to train them better.

To give people some idea of how bad education is: I learned computer science at an ABET-accredited college. The vast majority of the career skills I developed were from learning on my own, not from my coursework. Nowhere in my classes was there any discussion of source control. I had to teach my classmates how to use Subversion.

So often we forget that almost all education is terrible. We're only jarred out of status quo bias when a new type of school comes along.

1. https://en.wikipedia.org/wiki/Sheepskin_effect