Yeah, there's a correlation != causation problem with weak students who tend to miss class being the ones who most need it, but the overall idea of class doing things that can't really be done otherwise still holds. There are also a certain number of students who say or believe, "I'm already a good writer; I don't need to take a composition class." Out of the ~300 I've taught, that's probably been true of one to five, or so, but far more seem to have believed it.
A school like the one listed sounds great. It also sounds like it'll work best for the highly motivated. One problem with the HN posts about how universities are wasteful, unnecessary, and so on, is that a pretty small percentage of people are willing to do university-caliber work without the structure of the university. HN posters tend to forget about the other 97% of the world. I tend to see them, and so do a lot of other teacher / prof types.