The two worlds of the nice SLAC schools and the larger public universities are quite different. It may be that good SLAC students can succeed in online education, but these students are the minority. The majority of college students aren't particularly motivated and lack basic academic skills. In online formats, these students suffer.
Please, let's not fall into the 'blame the teacher' routine. Our state legislatures are doing enough of that, thank you.
It is a common misconception that students are 'tech-savvy'. That has not been my experience. My students are social-media savvy. They are pop-culture savvy. They are 'always-be-in-contact-with-friends savvy'. But they are not particularly smart with Excel, PPT, SPSS, or even Word. It continues to amaze me how ignorant they are of how some basic technology works.
Again, this is from the perspective of a prof at a medium-sized, state university. It may indeed be different in the lofty world of the SLACs. But I work with the majority of our college population, and for them, online education is truly a gamble. As Apeneck said, dropout rates and grades overall are terrible for online platforms. To succeed in such classes, the student needs to be self-motivated, organized, and be capable of devoting the time to the class. My students? Easily a quarter of them have children of their own (different world, right?), nearly everyone has 1-2 jobs, and they are first-generation college students whose parents have NO IDEA what sort of environment fosters academic success. For these students, I recommend very strongly that the avoid online classes like the plague.