I think that the idea is great, but it's also very difficult to accomplish as you'll have to come to terms with existing universities. They won't welcome you with open arms as their first thought will be that you're going to take some potential students from them. Somebody who would have to take a loan, and rent a place to be able to study, will now do it from home for a fraction of the price. Also, the teachers would have to allocate additional time and the time of a university professor isn't cheap.
The idea is great and I'm sure it could work, but it's going to require a huge budget.