Meanwhile, Coursera has 677 courses available for free, many of them excellent. You don't get the diploma, but if the diploma is backed by lower-quality classes and grade inflation, that's going to matter less and less.
It does cost though ($200/month), which can be significant out-of-pocket if you're in a low-paying job, and you may not need whatever service that $200 buys you. It's unclear what that goes to, but I'm assuming it's to the coaches.
Still better than American university prices
You then have something close to the original Universities around 1100 ad or so!
On their other hand it is bizarre to come into a thread about how teachers aren't getting paid despite school costs rising and present as an alternative paying teachers even less.
On the gripping hand I'm not entirely sure what you think the welfare theorems have to do with this but its worth remember that they do not and quite likely cannot actually describe reality.
But my main point is this: given that good competition exists, if colleges don't fix this quality issue, enrollment will drop and the situation for their teachers will keep getting worse.
(But professors at Coursera could get paid well for their efforts, if Coursera ends up with an effective business model.)