We used Moodle in the engineering department at my Uni and let me say - its better than blackboard (what isn't?) but its not "miles ahead" by a long shot. Its still pretty awful. I think the space is ripe for disruption.
The biggest problem is that both eCollege and Blackboard hold many patents related to the space, AND any solution has to follow certain guidelines/requirements set forth in some law somewhere (never did try to get more into it, our proposal was shot down hard).
The Blackboard '138 patent was shot down both in court and by the USPTO reexamination.