Physical classrooms don't really scale either, is that really a fundamental problem?
Indeed. Education isn't supposed to "scale". We've mucked around with education so much and subjected it to tech fad after tech fad that we hardly have anything resembling education.
Because this has been going on so long, most people's reference point for what constitutes "education" is simply off, mistaking "training" or something like that for it. But the purpose of education is intellectual formation, the ability to reason competently, and the comprehension of basic reality, which enables genuine intellectual freedom (there are moral presuppositions, too; immorality deranges the mind). This is what the classical liberal arts were about.
The very bare minimum criterion (and it is a very bare minimum) for someone to be able to claim to be educated is not only knowledge of their field, but knowledge of the intellectual nature, foundations, and basis of their field in the greater intellectual scope. I would not hold someone with only that bare minimum in especially high esteem vis-a-vis education, but even that bar is higher than what education today provides.
Yes. Tools like Khan Academy help lots of talented kids to progress in the curriculum beyond what's available in physical classrooms available to them.