I still don't understand how this works. What lab does the online student work in? Where are they conducting their experiments? Who is providing oversight there? Where are they doing practicums and how is the school providing oversight? If one is able to work a full-time job in addition to going to grad school, how can they possibly be learning as much? We're all bound by time, and even if I worked 100 hours a week I don't feel like I would be able to learn all that I should be learning.
Some classes (esp. clinical) cannot really be offered online due to the nature of what they involve. Of the classes that have the potential to be taught online, some would prove more challenging than others.
However, all of this seems irrelevant, because the classroom is only a TINY portion of what graduate training consists of at a typical school. You mention on-the-job training...well that's what grad school is. Classes are supplements to that, they are not the primary concern in graduate school, nor should they be. I agree that a substantial portion of coursework could probably be offered online. I don't really see a problem with it for some courses. It might make discussion a bit less convenient, but there are work-arounds for that.
If all grad school consisted of was coursework and a minimal-caliber dissertation then yeah, it could probably be online. That's only a small part of grad school education though.