Couldn't agree more - I really want to spend more time taking such amazing courses FOR FREE rather paying humongous tuition differential and sit in a class where the course material is not challenging/thought provoking enough?

Instead of offering separate certificates for courses, why don't they make this an open platform? Say I might be registered at a community college, and instead of choosing to register for "CSXX - Artificial Intelligence" I register for ai-class.com. ai-class/udacity/mitx validates my creds against my university's database and whatever grades I get in quizs, mid terms and finals are pushed from ai-class/udacity/mitx-s to my school's transcript generation system. If ai-class/udacity/mitx-s give an API - kids who maintain schools website should be able to integrate this within a semester.

How this'll benefit the current status quo:

For the students:

Not everybody can go to Standford, MIT for various reasons - but to have a number of courses in your transcript from such prestigious institutions will open doors for him - not only intellectually but also professionally. When he registers for courses, at the beginning of the semester - the registration software shows him the current offering which is a Plain Old Lecture center class by an inhouse faculty and an online class from Prof. Ng. He decides whichever works for him - or may be register for both and see which one suits him and drops the other one.

I strongly believe in the phrase "You become average of the 5 people you hang out with" - think if your classmates are as smart as people in hackernews. [Gawd - no curves in that case!]

For Professors:

They'll be disrupted. I mean, right now the challenge a professor faces is only when there is another professor in the same department offering the same course that same semester. So they tend to use the same slides from the book, same projects (this makes me mad) for generations really. The content is stale compared to what's out there in the real world. Obviously, students paying tuition would want value for their money and for many, going to a good school is gateway to a great job - only to find what he learned in class has been deprecated by industry standard. Students seeing more value in an online course would ditch the stale professors. Furthermore, many hotshot professors really don't give a shit about teaching - they really want to do research, but the department wants them to teach as there's no substitute for that course. If they adopt ai-class/udacity/mitx-s, burden on research profs can be lightened a bit. But bottom line, Professors have to be innovators to bring the students to his class. And if you really enjoy teaching like Prof. Walter Lewin - the world will be tuning in and you'll get paid too (read next point).

For Universities:
Oh you feudal system, you need to innovate to survive. Let me show you why this will make your profits soar:
(1) by allowing students the flexibility to choose from you'll invite more clients (er, students)
(2) Even if you can't afford superstar faculty like Prof. Thrun or Norvig, you can still pay udacity to use their course and get them in your portfolio. Think of the savings!
(3) If you have superstar profs - you can do this too! Just allow other universities to use your courses and charge them for that! Then pay a cut to the professors for doing such a wonderful job.