Can you elaborate on what you mean by "reputation"? I think it's potentially a really interesting point and I'd just like to have a better idea of what you mean by it.
Accreditation is a minimum standard, and is applied to the institution as a whole. As I'm carelessly throwing it around, "reputation" would refer to the effectiveness of an institution's graduates due to their education.
I guess I'm getting at a vocational measure, e.g. how well is a graduate prepared as a professional. The issue with online education is that accreditation is typically purchased through the acquisition of an existing brick and mortar school. See: http://www.pbs.org/wgbh/pages/frontline/collegeinc/view/
However, if you are hiring a fresh graduate as a programmer, accreditation doesn't differentiate the candidates because they all have accredited degrees. What matters more is the ability of the school to turn out people with a higher caliber of skills, knowledges and abilities...the number of books in the library and Phd's on the professor's office walls aren't the important metric.
Accreditation matters for graduate schools and for licensing boards (law, medicine, etc.). Building the rest of higher education around it, doesn't make a lot of sense.
