I'm not entirely sure if the debate is about degrees, or college. They aren't exactly the same.
Colleges, in my opinion, aren't about degrees, but are about a learning environment. Students should go to them to learn to think. I'll use myself as an example.
I love computers and technology. I would gladly do something useless with computers to amuse myself, and just for the sake of doing it. I want to get a career with computers, so I can be around them and maybe even develop some things that interest me at my job. (as opposed to potentially very boring server maintainence)
I know for a fact degrees aren't everything for some organizations. I have a relative who runs a game developing company. Some of their talent don't have degrees. They really don't care if you have a piece of paper, they care what you can do. And that's why most programming jobs (at least for game stuff) you are required to prove what you can do with either material proof (demos) and/or experience. They know college educations don't exactly count as experience.
So I have two options to learn about computers on a higher level: go to college, or get a job and study on my own time. Which sounds better to you? Not only does not going to college mean I have to support myself, I also have to kick my ass and get to learning. Since I have scholarships, college not only provides the most amount of learning time, it provides a better learning environment (deadlines and help). Not to mention in college I'll meet lots of similar people, and even different people.
"College can give you knowledge: it cannot give you talent."
True, but I know I have some talent. But I cannot nurture that talent without the right environment. High-school taught me how to be lazy and get reasonable grades (A's in the easy classes like math, B's in the boring classes) with almost no homework (no studying, but all nighters for assignments). I wouldn't have it any other way, since the material in high school was too boring to be worth my time.
For me, the idea that college has specific learning criteria is not a problem. For one it forces you to work within boundaries, that is useful for many jobs. But it doesn't mean you are that restricted. You can be creative with your projects of course, especially if creativity is a means to efficiency.
A computer science teacher I met told me a story about a group working on a project. One student hardly contributed to the project at all. The day before it was due, he came in late and redesigned the whole thing so it was much smaller and more efficient (they were working with some simple computer designs it looked like - a circuit board with a programmable chip, ram, and interface...). The fact that maybe he should have been communicating more with his group aside, that example of creativity and intelligence made college sound so much more exciting to me.
If you are getting a PhD, doesn't that give you opportunities to be creative, within a college/university environment: working on thesis', etc...?
I can't wait. (I start september)