1. It is a form of status seeking and conspicuous consumption.
2. It provides a) a valuable social network, not to mention b) opportunities for assortative mating.
3. It is a life-style choice (see 1). Moreover, The enormous residential infrastructure keeps retention/graduation rates very high (see also 4b).
4. It a) teaches a lot of important social skills in b) a protective environment.
5. And for a minority group of students it is an escape from one's class.
So, while online education may be good enough for lots of teaching environments, it undermines the very reasons for existing for the elite undergraduate institutions. (I say all of this while being agnostic about the kind of claims that turn on irreplaceable teacher-student relationships.) So, expect more foreign campuses and other clever brand-extensions, and a few show-case online programs that are a clever marketing ploy.