If universities don't cannibalize their own business by taking education online, someone else will. As broadband becomes ubiquitous and tuition fees increase, online alternatives will become increasingly appealing and attractive. Companies and organisations that try to preserve their old business models rather than adapting to new ones will go the way of Blockbuster and HMV, who if they had the vision early enough, they could have become what Netflix and Amazon are now, but came far too late to the digital party to catch up.
But I don't think the MOOC model is a sustainable model of education. You need real interaction and intellectual community, which isn't as easily scalable, and which is what people will end up paying for. But new and different models are already emerging, and the digital revolution will be as painful for higher education as it was and is for the music, newspaper and publishing industries.
There are other forms of online education that offer a better model. There are some institutions, such as the Mythgard Institute and Signum University, that offer some content for free, but charge a small fee for auditing a course, and a larger fee (but still much less than bricks and mortar education) for doing the course for credit with weekly small-group seminars with the course leader.
There are some kinds of learning that can be done simply by watching lectures, keeping up with the reading and doing some exercises, but the best higher education learning experience requires real interaction with both leading academics as teachers, and with peers as intellectual community.
The Internet is revolutionary for education in removing barriers of time and geography, making it much easier for people to fit in ongoing education in their lives wherever they live, and to have access to the best in their field wherever they happen to be studying.
But real interaction isn't scalable to tens of thousands. You also need to pay for academics to actually get on and do research, so that they are producing new knowledge, ideas and insights to teach. MOOCs are one model and will have a place in the emerging online education marketplace, but they aren't the only or best future of digital education.
The same challenges face many other sectors - publishers are going through many of the same problems of adapting to new digital realities. How long will it be before there's an educational equivalent of self-publishing like Amazon's Kindle Direct programme, where academics can offer courses directly to students online and get paid a decent amount for it? Will the university as we know it remain relevant in the digital age, or will it usher in a new era of the "independent scholar", with students mixing and matching learning from the best minds in their area of study, wherever they are in the world, regardless of institutional affiliation?
As the supposed traditional Chinese curse goes, "May you live in interesting times".