Yes, if everything was available online, it would take out the exclusivity of the major festivals (which also act as markets for films without distribution). Why brave Park City in January if you can just fire up the web browser and see everything. But this also works into the filmmakers favor if they make it into these festivals; over a week or weekend they can make some very important connections face to face even if their film isn't picked up, as well as gain valuable audience reaction that can be used to revise and tweak before release.
And there's really nothing like spending a week watching 3-5 films a day with enthusiastic crowds.