Two days before I flew south to speak at Michigan State University, I read an article in The Economist that asked the question in the title of this post. As it says (quoting US News & World Report), "If colleges were businesses, they would be ripe for hostile takeovers, complete with serious cost-cutting and painful reorganisations." I agree with many of their points: the universities I have worked at (six of them, on three continents) all suffered from the sedimentary buildup of red tape that you'd expect of a large organization that hasn't faced real competitive pressure in living memory, and struggled to achieve either of their core goals of fostering research and passing knowledge on. To quote a friend who's still in the system, "We're here to do research, they pay us to teach, we spend our time on administration."
It's tempting to look to technology for a solution, but I don't think webcasting or interactive game-style tutorials will have any real impact on students unless they're supported by large-scale institutional change. To continue with the auto analogy, GM didn't fail because its machinery wasn't as good as Toyota's; it failed because its business model and thought processes weren't as good. That's why I think that the most interesting part of what we're doing isn't the screencasts we're making, but the peer support and just-in-time tutoring we're going to start putting on top of them next month. If we can do for students from anywhere what The Hacker Within has done at the University of Wisconsin, then we'll be doing more than help grad students in science and engineering program better: we'll be helping, in a small way, to figure out what a 21st Century education ought to look like.