The latter regime is less a function of the ratio itself and more a function of the total number of accessible teachers, and the ability to switch teachers at will to find the one most suited to your learning style. If a university had 100 teachers all teaching the same course in the low or medium STR regimes and students were able to easily swap between teachers at will, the effect would be the same.
The ratio is really what matters more than absolute numbers; it tells us where the bottleneck is (supply or demand).
If the STR is 2:1 and you've got 1000 teachers, it means you've got 2000 students. If only 5% of teachers are good (see: sturgeon's law), you've still got competition centered on the student side, as 2k students fight to get into the classes with the 50 good teachers.
Ah, I get your point now. In my hypothetical example, you could still have those 2000 students enrolled with only the 50 good teachers. The overall STR would still be 2:1, but most of the teachers would have no students, so the effective STR would be 40:1.
The main thing distinguishing online education is the ability for students to all flock to the good teachers and completely abandon the crappy ones.
