It does scale even better than anything else. Majority of students are just not very good at it. And proving that they have learned sufficiently is hard. Thus schools and universities.
Mediocre student that sits through lectures, does the homework and submits assignment on due dates will get a good level of mastery in the subject. The very same student would be totally lost relying only on self-studying - he would not even know what he doesn't know.
I fully admit that for efficient time spend and production of sufficiently educated students it is not effective method.