Internet courses will never have the clarity of a university. Internet courses do not have anyone you can talk to for better understanding.
Universities have a way of setting a students momentum. Without this momentum, chances are high that the student will simply stop. The need and desire to be motivated will always be a factor. There is no momentum and very little motivation in Internet studies.
This depends on the quality of the program. I can't speak for non-accredited online courses, but paid classes from accredited colleges and universities only lack the social aspect of campus enrollment. Professors and support staff (tutors, etc.) are all available via phone, Skype, and Blackboard. Moreover, classes are structured to ensure students are properly learning the material.
I also disagree with the statement that online studies won't motivate a student. Although I would certainly agree this may be the case for free courses with no deadlines, if $7,000+ per semester and a real GPA doesn't motivate a student to succeed in an online environment, being on campus is unlikely to be much different. The difference is that an online environment requires a different study skill set. You need to be highly self-motivated and know how to study effectively (time management). If you can't do these things without someone holding your hand, you'll have a tough time.
A question I have just popped up. Would it be easier for one to cheat by borrowing a classmates answers or by googling it online if you were attending it online?
In theory, yes. However, most (if not all) professors I've had in my online courses are very savvy when it comes to preventing Google from taking exams for people. Major tests, assignments, and so forth are generally not structured in a way to be friendly to cheating. Typically, highly weighted assignments and exams involve novel situations (unique legal scenarios, for instance) or comprehensive analysis that cannot simply be Googled, "peeked" from your textbook, or traded. If you were to try and fudge your answers, you wouldn't make it halfway through the test before time expired.
Getting back to the original question, I doubt that online education will put traditional colleges and universities out of business. Rather, it will become another aspect of higher education as institutions start shifting to online platforms to reach more students and make more money.
The real question is whether or not the degree programs being offered will continue to be worth the cost of admission in the coming 20 years, and, as a result, whether the cost-effectiveness of accredited online programs will be a boon for students. People seem to allude to the fact that supply and demand is stacked firmly against students. 20-30 years ago undergraduate degrees were well worth the time and effort because their economic utility was high and the cost of going to school low. Since the market is now flooded with degree holders and seekers, that equation has changed: tuition is skyrocketing and the utility of undergraduate (and soon graduate) degrees are, on average, either stagnant or declining (depending on the degree). Globalization is only compounding the issue. If you aren't an engineer or a highly skilled financial specialist, higher education is going to be a distant second to real-world experience in the future.