Why hasn't it replaced brick and mortar institutions? Yglesias blames a lack of self-modivation:
[Y]ou can find all the relevant textbooks, lectures, information, etc. online already. And yet the number of people who’ve self-taught calculus is tiny.
Kevin Drum nods:
Aside from the social virtues of a physical college campus, its real virtue is that it sets up a commitment structure: you feel obligated to go to class, and once you're in class you feel obligated to do the homework, etc. Even at that lots of students don't go to class and don't do the homework, but lots do. But if you're studying online, you have to self-motivate at a much higher level. And it's a level that, frankly, most of us just aren't capable of.
An Yglesias commenter complicates the debate:
I think you're wrong in saying that learning calculus will be "rewarded in the marketplace". What is rewarded is having a qualification in calculus. If you learn it yourself from a. book, or from an online not-for-credit course, then I don't think you'll get any extra money for having that knowledge.
The Dish 