I could see online education supplementing, rather than replacing the college experience. Based on my experience at a large public university (UCLA), my first two years was spent skipping classes that were held in large lecture halls with 200+ students. I ended up learning 10 weeks of material in the week before midterms and finals. A lot of this lower division coursework could easily have been replaced with online lectures. Maybe what we'll see emerge is an online junior college with the ability to let students "transfer-in" to finish their degree in 2 years.
For an average teenager who is about to go to college, online education is a less favorable choice as it would probably be deemed less prestigious due to issues mentioned in the article. In the near future, the education industry could primarily influence markets which deal with professional or people who would use it for the sake of learning (few and difficult to indulge them over long periods).