I do think that this distance degree is fast coming, but I don't think you can get a 'world class' education from it. Perhaps I was spoiled, but most of my lectures were from professors that knew my name, and we had extensive dialogs during those lectures. My class sizes after my second year probably averaged 15 students. I have had 'lecture hall' classes, and I think those are pretty similar to distance learning. It's educational, but I wouldn't call it 'world class', no matter what campus it takes place at. That said, I agree that many versions of the college education could be replaced by distance learning. In fact they should be, because students are paying far too much for what they get.
There's not doubt that one of the greatest aspects of the classroom setting is the interaction between students and between students and teacher. How can distance learning recreate this? Would you have needed to be in the room with the prof to have experienced what you did to the fullest extent? Could that prof have "known your name" even in a distance learning environment via "chat" or "hangout" sessions?