You simply have to differentiate between education and schooling. I have all of both I'll ever need, but use little of it in my work (mostly the research and some math skills). If the person knows the subject, I'd take them over anyone highly "schooled." Universities had their millennium, but I hope they're coming to an end as we know them. At my age today, if you offered me a bachelor's degree with significant debt against my own self-motivated ability to learn online without a dime of debt, I would not go to college.
Hmm. This sounds a bit like throwing out babies with bathwater. I'd like to do some separating myself.
First, let's separate "complete path of education" with "Some Classes". Very roughly, a uni degree does provide *some* organized learning of a subject. Sure, when you get out you find that it has to be tweaked, but it was modestly efficient for me. But I believe a big part of this is also the Elective process, where if 5 people do Business degrees, one goes for marketing, one goes for industrial design, one goes for HR, one goes for sales, and one goes into accounting.
So Mr. Thrun's initiative is certainly a nice start, but it must *not* end with "3 classes per level comprising only one path". There have been a few other open-ed initiatives recently, one of which MIT was involved, but they looked a lot like loss leader sales - juicy low level courses were available, then like that McDonald's promo, the ones you needed to complete the degree were back under full price.
To 40hz's snarky but underrated remark, a full degree in itself is not a hobby - education is education. It's no fault of the student who did his part. That's where these points intersect.
If the student could prove the same education but earned cheaply through one of these initiatives, and we got past the fraud problems, then that's part of the education of the future. In all our wars on copyright it's kinda amazing that no one is really mentioning education.
Finally to the "learn on your own vs schooling" bit, that just means that we need more modular education. "Everything is teachable" but those particular details never seem to make into standard course offerings. If anything, run it like "Go to Khan Academy. Choose your own 538 modules."