The problem with online education is the lack of available credentials that are well recognized. The main reason people pay $50k a year to go to a top school is to get the well recognized credential. The ability to learn has gone online. Many top colleges such as MIT, Stanford, Yale and Harvard have put some of their course material online but you can't get recognized for what you have learned. Someone needs to create a prestigious, low-cost online undergraduate degree for students that can't afford a conventional college or who don't want to be tied down to one location for 4 years.
Right now I would say that the University of London International Program is the most respected program available in the category: http://en.wikipedia.org/wiki/University_of_London_Internatio....
I look forward to more known universities creating online versions of their educational programs but I think top universities that have no problem attracting students will resist making the change. And for new programs, getting the necessary prestige and recognition will be a very uphill battle but I hope some social entrepreneur will find a way to crack the code. Also, Salman Khan has a lot of interesting views on the topic of the college of the future: http://abiekatz.com/2011/06/salman-khan-presents-his-vision-...