Having developed and operated such a facility, I can attest that there is a place for them. In fact our 9-hole course and range evolved into a golf academy with a 9-hole course. We expanded our all-grass range tee from 30 to 45 stations, added 2 more practice greens, a short game area and chipping/pitching green, 4 practice bunkers (0-7' deep) and an 18-hole bentgrass miniture golf course (modeled after Muirfield). In winter, we cleared out the dining room and converted it to indoor training. After 15 years, we had hundreds of students each year.
The course started out as a par 34 (3-3's & 1-5) But we found the market called it an "executive" course. We later stretched it to a par 35 (with 2-5's) and then it became a "real" course. We also added an extra tee to each hole (4) and put out Jr. markers - years before Tee It Forward came out. The key was,, although the course was on the short side, we treated all the green complexes as we would for any course and our super maintained them just like the private club he came from. In fact, we were the place to go on Mondays when your private club was closed. Heck, we even had guys bring there own caddies.
Tomake something like this work, you would need abour $1 million in annual income. How you get there is up to you.