I'm not 100% sure how the Iowa caucus works, but how could you have internet voting for a caucus at all? Don't they have a system of on-the-spot reapportioning when candidates can't hit a specific percentage? How is that ever going to work?
You're correct. It wouldn't really work unless there's back-and-forth communication, so that voters can reapportion their support, if their candidate turns out not to be viable. Though I suppose if you submitted a preferential ballot, with every candidate ranked, then it could all be done automatically.
A preferential ballot would allow some voters to opt out of the discussions. That could be problematic for preserving the caucus system.
That said, I have no problem with doing away with caucuses. It gives activists too much power.