The argument is that universities have become too expensive, from bloated administrative costs, tenured professors who do not teach, and student amenities that approach the standards of luxury hotels. On the other hand, the internet with its possibilities for live conferencing and video streaming can convey the same knowledge at a mere fraction of the cost. To be sure, there are benefits of a traditional, residential college education, but these are not so great as to justify taking on mountains of debt. So, it is inevitable and probably a good thing that universities be replaced by online courses.
This argument is increasingly put forward by people with good judgment (although rather selectively: I do not see anyone arguing that high schools or medical schools should be replaced by the internet). But what should a Catholic think about it? I can only tell you what I think about it, as a Catholic in higher education.
My first thought is that the internet is irrelevant to the argument, since there have always been books. From time immemorial, professors have written up their lecture notes -- together with their board work, additional explanations, digressions, and replies to questions -- and sold them at low cost to the masses. These are called textbooks and may be gotten for free at one's local library. (For a complete "internet" experience, with the sound and image of a living person, read the book out loud.) But no reasonable person ever argued that libraries should replace universities. Already with the invention of the radio, never mind television, lectures could have been broadcast live to the masses, but, again, no one ever wanted to enroll in a "radio broadcast university."
The difference between those earlier times, when the argument never arose, and our own, seems to be mainly one of degradation. In our time, universities have deteriorated as universities, and human social life has degraded in quality, and only on that account can the argument seem compelling.
Universities have deteriorated for reasons that Blessed John Henry Newman long ago diagnosed, and which are implied by the Church's teaching in "Ex Corde Ecclesiae": if you extract as if by violence from the core of the university the vibrant faculty of theology which a university (as purporting to teach universal knowledge) is meant to have, then you destroy its unity. You remove what serves as the basis for genuine intellectual fellowship among the professors, and therefore you destroy also the basis for common life among the students. At the same time, in removing the university's commitment to wisdom, you leave the institution with no more than a utilitarian justification for its existence.
Social life has deteriorated because we favor virtual life over actual life. We no longer even bowl alone: we bowl online. Whatever glows and is pliant to our whims is good; that which is material and requires our service is bad. We prefer the ease of watching on a screen rather than the humiliating work of doing. They may not admit it, but friends in the same room really prefer to text each other than talk.