I was watching the Daily Show when Pawlenty made his online education pitch and was appalled. As someone who has done a great deal of research into online education (I am ABD right now and my Ph.D will be in online learning) and who works in the trenches managing an distance learning and instructional design center at an institution, it is clear that Mr. Pawlenty is not adequately apprised of or knowledgeable on the subject.
First, an adequately designed and taught online course takes more time to teach than a face-to-face course. The reason? Interaction and engagement. Because online courses are not synchronous (at least they shouldn't be), asynchronous methods such as discussions forums/postings must be used to create community and adequately asses learners grasp of subject matter. These discussion posts must be read and thoughtfully commented on by the faculty teaching them. Many are graded. This takes time. In addition because online tests are essentially open-book, other assessment methods, usually writing intensive ones are used. Again, time intensive.
Second, Time is money. It takes more resources and time to convert existing face-to-face (f2f) courses to online. F2f courses, or course-packs that are summarily dumped on to the online venue are not best case and resemble correspondence courses at best. These courses do the opposite of well-designed online courses, their rigor suffers, and they isolate students rather than build community, interaction, critical thinking skills and engagement. Creating multimedia also takes time and money. Depending upon subject matter, courses should include well-designed multimedia (visual & verbal modes) which can also enhance content transfer. Not just multimedia for multimedia sake, but interactive content created to assist learners in grasping and assimilating content. The more interactive and multimedia intensive an online course is the more time and expertise it takes, and thus the more expensive it is. Add simulations and virtual environments to the mix and it can be daunting.
Lastly, Not all students learn well online (maturity, self-motivation, computer/online access, technical skills) and not all faculty teach well in this venue (teaching style, technical skills). A one-size fits all mentality will do great harm to the quality of education students receive.
All in all I find Mr. Pawlenty's comments uninformed and based on personal opinion rather than research (a.k.a. the facts as we presently understand them). Great for politics and sensationalism in these budget cutting days, but bad for those who have devoted their lives to the education of students.