Thank you @matthewoz101 for taking the time to write that up. You hit on some points I missed and added to my post. Khan academy is a great resource. I show my kid videos and he really takes something away from it when I do. He is almost 9.

I think the answer to your first question on why are colleges are so inefficient at transferring information (great wording by the way) is because they have never had to work for their profit. Society does most of the advertising for them and they just sit back and watch the students enroll. Why? Because that's what you do.

Without facing adversity, a system is at risk of becoming complacent. This is all I can assume happened here. I can relate this to an athlete that is praised all through out his career. Wins the world cup at 17 year of age and has reached his ultimate goal. What do you do next? You can try and build a legacy or you can sit back relax and say "I did it".

Until the universities are hit in the pocket book they will not need to change their methods. I can guarantee with 100% certainty that if students were given an alternative (such as Khan academy) that was respected by society just as much as university, they may chose the alternate. When they start to chose the alternate or competitor, the university will notice their revenue is down and they will react. It is the only way they decide to make a change. If its not broke (in their opinion) don't fix it. If money keeps rolling in, it must not be broke.

It is important to remember that everyone learns differently. Some people can take a book or computer and sit down and teach themselves something. Other people need to be taught and have things explained beyond the words they read. The only thing that really matters is that you understand what you have learned and are able to apply it.

I look forward to hearing more of your thoughts.