It wouldn't really work the way you are thinking. If 10-25% of applicants to the college I went to decided to go to Udacity instead, my college would have had e

It wouldn't really work the way you are thinking. If 10-25% of applicants to the college I went to decided to go to Udacity instead, my college would have had exactly the same number of freshman and wouldn't notice a dollar difference in its revenue. They already only admitted X% of the people who wanted to come in, where 0%<X<100%. So these online college courses aren't going to kill regular universities. They might make the odds of getting in easier as some people forego normal college for online school. Likely the schools that currently struggle to fill their classes (lower tier schools, for-profit schools) will go out of business, but these online classes simply aren't going to hurt the big colleges.