The rapid fall from grace of School of One is an important bellwether for the nascent ed tech bubble.
In particular, it reminds me that while the recent wave of prison privatization is an important precedent for school privatisation (of varying degrees), they're very different institutions. Prisons are almost by definition out of the public eye, while schools are right in the middle of it. Micro-managing local school budget proposal is the third most popular springtime hobby among white male seniors, after fishing and golfing.
Add the current test score obsession to the mix, and there will be real pressure for online vendors to produce substantial test score gains for less or the same amount of money, in a short period of time.
I don't think they can deliver.
We're looking at more of a wave of corruption and waste than an existential threat, unless they can also cycle through enough waves of SIG upheaval that confidence in urban public schools collapses completely. Believe it or not, we're still a ways away from that.