Ernie, you are correct that there has been limited interest in SCORM in higher ed, partly because (as you point out) SCORM is really designed for a self-paced learning environment and has somewhat less value where you have an active, participating instructor and partly because of the way that SCORM was marketed. On the issue of copyright, while SCORM could help with compliance issues, there are simpler mechanisms to do this.
SCORM's biggest advantage to dotLRN would be as a cross-over into the world of non-profits and small to mid-sized companies. There really aren't many good choices for smaller organizations that want to do a mix of self-paced and instructor-facilitated learning, and dotLRN could potentially fill that niche rather nicely (although you start running into stiffer resistance to the technology platform than you probably get in higher ed).
But I'd have to agree that, at this point, dotLRN's core market of higher ed has made it fairly clear that SCORM isn't something that they care a whole lot about. It didn't have to go this way, but that's the way the cookie crumbled.
