If I ever return to school, I'd certainly be willing to consider online courses in combination with testing at an approved location.
I don't want college credit for browsing the web and watching videos. I want coaching, feedback and interaction from people with deep knowledge in their field.
@blahedo: True, it doesn't have to be video. Personally I prefer reading to watching a video.
I do think apprenticing needs to come back, big time, to complement a digital learning curriculum for the grunt work. In my undergrad, I'd say 2% of my time was actually professor-engaged, and the rest was assembly line rote work read-the-book-repeat-the-answer.
Sounds like a PhD program where you really are an apprentice and the professor is really a mentor.