Yes, schools will survive in the age of the web. Most people learn via interaction, not passive observation. That's the reason we have homework, and labs, and (at the K12 level) all sorts of silly in-class activities.
College education will not change much either. If the purpose of college was simply exposure to factual information, they would never have survived the commercialization of the textbook. Colleges are about higher-level, deeper interaction with the material. (This means different things for different majors.) Moreover, colleges provide a simple, relatively efficient way of proving familiarity or mastery of a subject matter that would be technologically impossible for a web-course to provide (i.e., prevention of most forms of cheating).
The web may affect the number of colleges, but it will not affect the fundamental nature of higher education.
College education will not change much either. If the purpose of college was simply exposure to factual information, they would never have survived the commercialization of the textbook. Colleges are about higher-level, deeper interaction with the material. (This means different things for different majors.) Moreover, colleges provide a simple, relatively efficient way of proving familiarity or mastery of a subject matter that would be technologically impossible for a web-course to provide (i.e., prevention of most forms of cheating).
The web may affect the number of colleges, but it will not affect the fundamental nature of higher education.