EXACTLY.
My biggest fear (if I were going to an online institution) would be how an employer would look at it. If I was an employer, I would be afraid of someone who got a degree from an online-only school. I would think "Hey, why can't this guy socialize? Is he bad with customers?" etc
If you take all online classes at a school with a physical location -- even if you only take one in-school course -- you can get away with looking like a normal person

. No offense intended, but I think that unless you already have a career job, an online school in NJ is just as relevant as an online school in AZ (U of Phoenix online, for example)