I've actually looked into the the online master's engineering program that Purdue offers through distance learning. It's the same courses taught by the same professors. You do the same homework and take the same tests which need to be administered by a designated proctor. The course catalog that's available is light on courses that require lab work and heavy on courses that are more theoretical because those can be done just without any additional equipment.
As far as I can tell Purdue does not make any distinction between a degree earned on their campus or through distance learning. Considering they have a great deal to lose if their name is diluted by a low quality online program it seemed like a completely respectable way to get a degree.
I would be concerned about a degree from a place that is not acredited by ABET or doesn't have a well known name for engineering. Schools with a valuable reputation aren't going to risk it by a bad program while schools that have nothing to lose will churn out degrees to make a few bucks.
This. I got my Master's in Telecommunications from the University of Colorado at Boulder(CU Boulder) via distance learning. It is the same class, with the same teachers and students and the same content. The only difference is that it is taped vs. live. I have to do the same homework and same projects with people in class, sometimes even in teams of people who are in class. I had to go to campus once to give my capstone presentation.
The content and the exams are not watered down in grad school (even online). They are very detailed and if you do not understand the content, you will not pass the course.
I also attended UC Irvine's grad school on campus for Networked Systems for two years before I transferred to CU (had to move due to taking on a new job) so I know how grad school is like in person.
I am in a unique position to say that both(distance and on campus) were equally difficult (content wise) and not all online programs should be discounted. Each program was difficult in technical classes. Going to school via distance learning had additional problems of turnaround time for questions because I simply could not just ask them when they came to me. I also had to deal with isolation from my classmates who for the sake of team assignments were very often in class students. We had to use skype, conference calls, etc. to get stuff done.
I cannot speak for all distance learning programs but I would say any that follow the same format (live on campus lectures taped). If you want a good distance learning education, I can only recommend going to big name schools or state schools.
BTW - CU does not differentiate between online and on campus degrees.... Neither should you.