People may frown upon online degrees simply because of the stigma that follows. Reputable online Universities ensure that their students earn their degrees and are not simply handed one after paying the initial costs. Without this public knowledge, it may be a long time before they can gain credibility. Therefore, as long as they have the degree and experience, they are qualified. I am much more apt to accept the credibility of online MBA degrees, if it is from a reputable school.
Education happens when ideas are shared and when they transform into other ideas.
Surely we all can think of a dozen 'Ivy League' graduates that we have encountered that would have a hard time finding their way out of a wet paper bag. After all, it really is not the school but the individual that is important. That discussion is lost online. The applicant's work experience and interview should be a more relevant indication of their qualification for a particular job than where they earned their degree. I can't speak for the validity of Internet-only institutions.