Plentiful cheap labor, abusive bureaucratic and lethargic organisational structure, plentiful federal subsidies... why aren't we seeing more startup universities / community colleges snapping up these over-qualified and underpaid professors for themselves and offering them to the highly subsidized and eager student population?

At some levels, college is a popularity contest to get the best credential. At other levels, college really is about learning the necessary skills to enter the work force.

Is government and self-regulation of education really such an incredible barrier to entry that new entrants can't offer better deals to the best teachers and still compete?

Edit: I am seriously considering getting together with 10 other parents I know, and we can just collectively pay someone like this to teach our kids all day. He could teach a class of 10 kids for a year, earn 3x as much, and we would still be paying less than half what the private school down the street costs.