I did quite well in the program and on the SAT I took to get into college in lieu of a high school diploma. I did okay in college too, graduating with honors. I really can't see what I lost by basically doing high school alone in my bedroom reading books and taking self-graded exams.
I think it can work with the major caveat that it has to be both voluntary and the student has to bring a genuine desire to learn to the table. Not all students do. I think Khan World School will work very well but for maybe 10% of students leaving 90% worse off. Conversely I think in-person traditional schooling will work well for 90% but make 10% worse off due to stuff like bullying.
It would be unconscionable to withhold something like Khan World School from the people it could benefit. It's okay that it doesn't work for everyone. Neither does the traditional system.