As stated, based on my personal experience tests are a good determinant on who should proceed and who should not. I get to know my students. Even before they take their test I know, for the most part, who are going to do well and who aren't. I know which ones know the material and which ones don't. I can't say, "I feel like you don't know the material and should not take Calc II." This would lead to too many arguments and acrimony.

I can give them a test and when they get an 'F' on it there is no argument. The test is a good measure of who knows the subject and who doesn't. For the most part. It's the most effective tool that I know of.

The absolutely mandatory part is the crux of the issue with regard to face-to-face classes. It forces students to meet at a set time and work on a given topic. In the absence of this forcing mechanism human nature takes over and most students fail miserably at the time management aspect of online classes. This is all anecdotal though. I don't have any research to back this up.