This is a very Important and timely question. I don’t think correspondence courses in traditional form are now of any use. These courses must be replaced with internet based online courses which will have a wider reach throughout the country and the world.
Infact, I would even like to point out a UGC rule which states that an open University in one state cannot offer it’s courses for students of another state. This rule must be done away with now because already IITs and other institutions are offering online courses with certification. With online education, state and national boundaries have become irrelevant.
So yes, traditional correspondence courses are not useful and must be replaced by online courses with or without blended learning.