You're saying that there's no clear benefit for the first option other than personal "learning style"? How does that fare when going head to head with the extremely obvious and objective advantages of the online option? There's always a compromise and if you gain flexibility and money something's gotta give elsewhere.
You're making a huge confusion if you think an online masters is just a channel of delivery for some material. A (good) classic masters is more than the professor handing out the material personally instead of emailing it to you (which they do anyway).
Exactly as you said, online is the option you choose when you no longer afford (time/money) the other one. It's for when you need to tick a box on an application. Otherwise you can easily skip it and substitute with your experience.
As a person with a bachelor, 2 masters, almost a PhD (:D), and a whole host of online courses and degrees I can tell you there's a world of difference between the two types of experience. So I treat those degrees with the corresponding level of respect. And please mind you, I said the degrees, not the degree holders.
I'm not saying that online=bad. But a good classic masters program will invariably be better than a good online masters program. Of course if something's already not up to par (classic or online) it becomes irrelevant by how much it fails.
How does that logically follow? Different people have different learning styles and are at different points in their lives and careers. The rigour of the material is orthogonal to the channel of delivery