Norvig is a great scientist and teacher, but you don't need this. In Residence concept is a throwback to the bad old days of exclusionary education. We have the Internet and great books (Norvig wrote one) and MOOCs the future is egalitarian.
Couldn't disagree more. The experience of receiving personal attention and guidance from a brilliant and skilled mentor is simply not replicated through a book or MOOC.
Not to say books and MOOCs can't be excellent learning tools, but you're creating an either-or fallacy.
Watching a veteran debug their way through a problem in person is equal parts fascinating and humbling. When you're one person, you're limited by the scope of what you can learn/accomplish on your own time, but when you're one of many, you can pool that time and expertise to really accomplish some amazing things. It's true that the internet is a force for equality but more often than not, apprenticeship and hacking together is faster and more fun :)
I don't get why you're so down on it. Yes, MOOCs have more chance to change the lives of a larger number of people because they scale better, but MOOCs, books, "just do it and see what breaks", formal education, and bootcamps like this all make sense.
You could arrange something like hacker school in your home town too, if you wanted to recreate this.