You're right, but I still think Thiel is on to something. At first I agreed that it was about a 'you don't need college' message, which I thought was a sort of a bad idea for the same reasons as you.

But after hearing him speak at length about his ideas in person my impression is that he feels college as it currently exists is not serving people that well, and he's frustrated by the lack of viable alternatives as much as anything else, so he's attempting to establish alternative career paths by subsidizing people who are willing to blaze new trails. Likewise I realized that his economically libertarian views are not so much a position of 'don't regulate' as a wish for a flatter and more responsive regulatory system.

College is still a good financial proposition in terms of having a net positive effect on lifetime earnings, but it has become commoditized in some very unhealthy ways that don't serve the public or students well. I thought MOOCs might be an answer to this but they;re not quite there yet, raw knowledge acquisition is only part of the equation.