I know for most For Profit Higher Ed investors and college owners, there is something intuitively problematic about this argument: They often see the teachers as pampered, overpaid and lazy. Some of it is actually true: Many people working in these colleges make academic sounding excuses while behaving in a mercenary manner. I am not sure what leads to what - whether the approach the employers take make such behaviour necessary or the other way round - but I am sure the truth will be somewhere in between, with some responsibility from both sides. But it is amazing to see how most tutors will have no institutional affiliation and will be expected to have none. This is one of the key problems that private higher education has not addressed yet.
This is somewhat central to my studies in the For Profit Higher Education, not because I am sympathetic to teacher unions, but because I think the private higher education has come to the point where they have to address the brand problem. There are many good things in For Profit Higher Education, and some of the governance practices and efficiencies can inform practices in public higher education. But, because of the issues mentioned above and more, For Profit higher education fails to crack the key requirement in higher education - that of brand, credibility and trust. While they claim to be innovative, this innovation is disproportionately about efficiency and less about brand. In fact, brand thinking in private higher education is to ape the practices of public ones, elaborate graduation ceremonies, lavish premises, titled professors etc., and one would think that it is yet to find ways to respect themselves what they do. [I am surely making generalisations, and some institutions are good at branding themselves, but the lack of confidence in branding mostly holds true].
Now, there is a line of reasoning that For-profit Education is not about creating Harvard or Stanford, but good education at a different level. However, the 'good' bit is central to the proposition, and not just about rhetoric. If MOOCs actually pose a challenge to anything, that will be to the run of the mill For-profits, which are surviving on issuing credentials which are worth nothing. The moment MOOC credits start gaining ground - there is evidence it already is - and get into areas like business and law, it will first take away a significant chunk of business away from For-profit (or at least reduce the profit for For-profit, which is already reeling under the various regulations in different countries). So, it would come down to brands, trust and good service, as competition and scrutiny finally arrive in For-Profit sector.
This is why I study the sector: Not because of the money that is being made, but rather for this is a sector in transition and interesting answers are to be found for challenging questions.