-vtq: But who runs the government? Lobbies mostly and 'powerful relationships'. When a market needs to be deregulated or stay deregulated because profit can be made - it will be deregulated or stay deregulated. Examples are air travel (arguably a good move), options trading (Greenspan blocked regulating that for decades and we got the 2008 financial crisis once the CDO market got s---ed dry), education: http://www.huffingtonpost.com/2011/10/14/goldman-sachs-for-profit-college_n_997409.html. Think of it this way - if the government (not some benevolent old dude with a beard btw) couldn't be bestirred to protect millions of American homeowners and their savings, what makes you think they give a rip for a few million students they consider to be societal bottom feeders anyway??
The only thing that takes out a 'crap product' in the US is the market dynamic of supply and demand. If there is no demand for a crap product the supply dries up. Caveat: For a large amount of the market that these crap products served the demand dries up. Will a smidge of that crap product still be sold? Of course. What else to hawk on late night TV?
Same with crap education: There will always be demand (poor people with underdeveloped skill sets from exposure to underfunded inner city primary and secondary education institutions) and because of that there will always be some form of funding even if it is a risky investment from the funder/bank side of view (see risky car loans, they still hand them out because on the whole they make money from the interest payments of those people who are paying in).
Future of distance/online education: The online post secondary education model has merit. Because we will be working longer in a very rapidly changing environment will will have to 'go back to school' a few times during our working lives. For adults with jobs, kids, lives, the online or evening school model is the only viable solution. But, and here is the but, the adults with the brains, the breeding and the money will attend the online schools attached to 'reputable' campus based schools, not some stand-alone for-profit call center with a server farm wrapped around it. The 'reputable' schools will crank out graduates that will further enhance their brand and the classic for-profits will be completely relegated into the 'dollar store' corner of the education market.