NITLE just held a conference on the uses of technology in the liberal arts. One key theme of the conference was that liberal arts colleges are headed for disaster because their business model is broken. Inside Higher Ed's summary of this conference theme is full of the language of crisis. NITLE's hope, of course, is that technology can help reduce the cost of education at these schools, and therefore save them. (Because, presumably, without liberal arts colleges people would cease to learn the liberal arts. A questionable assumption, but the theme for another post.)
But what the article seems not to ask is this: Why are liberal arts colleges expensive when the liberal arts aren't? After all, the lowest labor costs are to be found in liberal arts disciplines: a historian is cheaper than a finance professor; an english prof earns less than a PhD in nursing. The liberal arts require no costly infrastructure (except for the sciences, but the goals of science in higher ed are so far from the liberal arts that they hardly belong in the same institution). Because of the sort of practices that lead to learning in the liberal arts--discussion, writing, service-learning, group projects, etc.--it is conceivable that classes in the liberal arts could have larger enrollments than those in professional disciplines and achieve the same learning value. And because of the focus on human development in the liberal arts traditions, student support infrastructure could be less costly.
So the short answer to the question is this: Liberal arts colleges are costly because they aren't really liberal arts colleges. That is, over the years, liberal arts colleges have adopted the budgets, infrastructures, faculty roles, aspirations, and curricular specialization of comprehensive or research universities.
These things are almost impossible to put off once a school adopts them. And so the alarms sounded at NITLE and in many other venues are likely to be true. There will be liberal arts colleges that die because students can't afford them. But there is irony here, because once liberal arts colleges die, their place in the market could easily be filled--by liberal arts colleges.