In my college experience which was at the University of Minnesota,

My two postsecondary degrees are both from the University of Minnesota. As a Chinese major in the 1970s, my typical class size for in-major courses shrank down to three or four students total by the third year of the program. (First-year Chinese had fifty students in three sections in those days; second-year had fifteen in one section.) One of the great things about huge brick-and-mortar state universities over the last century has been having a large enough critical mass of students to offer rarely sought courses like Chinese (in those days) or Attic Greek or Classical Nahuatl (any day) or other courses that my friends took while enrolled. Harvard has enough sheer money from its endowment to offer Sanskrit or other rarely studied courses

http://news.ycombinator.com/reply?id=4137186&whence=item...

even if those courses gain very low enrollments. Most other universities subsidize limited enrollments in rare courses with high enrollments in the commonplace courses.

The great thing about more and more university-level courses going online is that eventually there should be a niche for university-level courses delivered online on almost any subject that has ever been treated in a university-level course. That will allow, I hope, curious learners to shop around and figure out which general statistics course (a HUGE enrollment course) and which Aramaic course (a course with tiny enrollment in the best of times) offers the most return of learning for the investment of time, effort, and some amount of money to take the course.

I think many brick-and-mortar universities, and perhaps approximately one state "flagship" university per state, will still be able to survive the onslaught of competition from online courses for a while because of prior claims to credentialing students and the advantage of in-person interaction with other students (and with some less introverted instructors). But further diversity of provision of courses allows each provider to specialize in what it does best, and should make learning more efficient (in the economist's sense of "efficient") for everyone.

P.S. The walk back and forth across the Mississippi River on the University of Minnesota Twin Cities campus was always pleasant to me. I liked seeing the university rowing team practicing in the river and the signs of the changes of seasons as I looked upstream and downstream along the riverbanks.

AFTER EDIT, responding to a point in another comment:

Yes, independent test centers with good test security will help online credentials gain acceptance, and Udacity has already anticipated this problem. Udacity has announced in a blog post, "Udacity in partnership with Pearson VUE announces testing centers,"

http://udacity.blogspot.com/2012/06/udacity-in-partnership-w...

a partnership "to make our classes count towards a credential that is recognized by employers." So this is an example of unbundling the package that is currently offered by degree-granting universities. The universities both teach courses and administer tests, and claim therefore to offer credentials that can be trusted. But one group of organizations could offer a wide selection of courses, while another group of organizations offers a wide selection of credentialing tests, and I expect that to be the wave of the future.