The "killer app" of the Internet seems to be communicating in some way. Email is wildly popular, as are social networking sites. The use of the Internet for communicating will probably have other unexpected affects. Maybe not overnight, but in a decade or two, the Internet is going to fundamentally change how higher education works, and what we're left with after it's changed may not look much like the system that we have today. This will be what I call "College 2.0."
The funding that university departments get is highly dependent on how many students they teach. That means that those huge freshman classes in chemistry, physics, math, economics that fill the big lecture halls heavily subsidize the operation of the departments that teach them. These classes are also the ones that are the easiest to replace with an on-line version of the class. That's even cheaper than using a graduate student, and it's probably the model that universities will move to in the future, and when they do this, the funding that they get may be dramatically reduced.
Without the funding provided by filling auditoriums full of undergraduates, the classes offered by universities will probably end up being limited to upper-level classes. Students will get their first two years of college on-line, and only go to a classroom for the last two years or so. When this happens, the number of faculty positions needed will decrease dramatically. I'd guess that maybe half of them won't be needed any more. Eliminating that many faculty positions is certainly a major and significant change, but that's where the Internet may be taking us – to College 2.0.