A growing trend in higher education institutions (HE) to move course offerings to Blended Learning (BL) modes is challenging many of our traditional views and practices of teaching and learning. Part of the problem is that many of those working within these institutions at the macro, meso and micro levels have stubbornly resisted abandoning the view that knowledge is imparted by the institution and that knowledge is consumed by students. Advances in technology have upturned this positionality as learners and institutions alike realize that roles are evolving in the process of education. Tracking the scholarship on BL, for example, reveals a major issue preventing successful learning outcomes is reticence on the part of learners to be socially interactive and engaged online. Through the lens of socialcultural and identity theories and a conceptualization of engagement being composed of behavioural, emotional and cognitive components, this paper aims to respond to a call for greater insight into this pressing issue. With findings from a recent qualitative longitudinal study of a BL program in a large private-for-profit university in Chile we unravel the complex social psychological aspects that contribute to learners' willingness, or unwillingness, to engage in interacting with others and with content online - an essential determinant of successful learning and quality BL programs. A critical discussion of the findings from multiple qualitative data sources reveals that the general lack of undergraduate students' incentive to develop agency and adopt empowered learner identities characteristic of active participators online, is strongly influenced by the assumed or imposed identities of teachers, academic leaders and institutional decision makers that create a climate that fails to nurture community building in these contexts. Abundant evidence suggests a model for BL in HE that could lead to decisive, strategic and coordinated action at each level and measurable improvement in student online learning engagement and outcomes.