Regardless, I think initiatives like this one which in general provide more opportunites to more people to better their lives is something I would like to see more of, not just in Germany but all over the world.
The atmosphere is very different and having studied in the UK i see the merits of both: a UK university basically runs like a school with a very strong support system and 1:1 touch with academics. In Germany its really a more "mass" approach in lectures and then seminars with lower ranking staff, not the actual professors. Also less other support e.g. psychologists, tech support,.. To succeed at a German university you have to grow up ;)
Also interestingly German universities seem to be much more political places. The UK I experienced as filled with extracurricular stuff, while in Germany there's much less of that and in return a much more vibrant political and debate culture.
Yes indeed this is the only state run distance-learning university, but I'd argue that you only really need one such institution. After all, you can study from anywhere :). They have regional centers in many German towns, but for most courses you only need to be there for the exams at the end of the semester, so you can also study hours away from the next regional center.
And it's quite successful. By number of enrolled students, it's the largest university of Germany at 77k, with the runner up having only 56k students.