There are lots of good points here, though I fear that the basic premise underlying it (and the whole expansion of higher education in the last quarter century) is becoming out of date. Forgive me if I'm misinterpreting what you're saying or putting words into your mouth, that's not my intention. I think that we (and society in general) needs to be aware of a shift in how higher education is perceived by large corporations, particularly in the UK.
As recently as the 1980s, it was true that a degree was a passport to a better life. On average, graduates earned more than non-graduates and were more socially mobile. Admittedly, graduates were also a small part of the population: in 1985 less than 20% of eighteen year-olds started degree courses. Those that did so were either privileged (I'm afraid that the rich always gt things easy) or had to really work to get past the problems of their backgrounds to compete, since the A' level exams on which the universities made their offers were norm-referenced rather than criterion referenced. Similialrly so too was the university grading system. Thus a first class degree meant that you were in the top ten percent of the eighteen or so percent of people that went to university.
Currently, it is about 53% of eighteen year-olds in the UK that start degree courses and the degrees themselves are criterion referenced (rightly so in my opinion). So the value of the degree is diminished in the eyes of most employers who remain elitist in their beliefs about whom they should employ. Simply, they want the best and so are increasingly looking to higher degrees as a baseline for jobs which, in the past, a bachelors degree would have sufficed. In other words a form of qualification inflation has set in, which explains why the UK faces unprecidented rates of graduate unemployment at the moment.
This situation is sadly exacerbated by the ridiculous way by the fact that universities are paid by students for their tuition. Given the way that these costs are increasing, each student asks himself (or herself) if it is worth going into debt to pay for a course where the pass rate is lower than that for another degree. There are reasons for saying yes to that: a genuine love of the subject, the desire for the prestige of having gone to a particular university or the simple need for a particular degree to pursue a chosen career are good examples. However, it is not unreasonable to see that the universities are faced with a conflict of interest. If they adopt high standards when awarding degrees, fewer students will pass/get the class of degree they desire. Consequently, fewer students will apply to the university in future years and so the university will face a large loss in income. Even if universities do not succumb to the temptation to make their degrees easier (and there is no evidence that they do, quite the opposite in fact), there is a problem in that the commercial world has the perception that they are. Thus degrees now are diminished career-buying currency.
Moreover, back when universities were funded by capitation (i.e. a direct grant from the government per student), students didn't feel like they were paying for their degrees and so were more likely to take courses that were more challenging. For example, in the 80s, Keele University was known for having the highest proportion of first class degrees of UK universities. The effect of this was that students avoided the place because the perception was that a first from Keele was worth less than an upper second from other universities. In the years since tuition fees have been introduced, Keele has become one of the more popular universities for undergraduates. Similarly, physics was a well subscribed course in the 80s whereas now schools careers advisors are told to push students into considering physics because it is so unpopular. The statement they quote is that even if every physics graduate were to enter teaching for the next nine years, there will still be a shortage in qualified physics teachers in schools. Which is why I, a virologist by training, have to teach physics to the 16-18 year-olds at my school as well as subjects more in keeping with my experience.
Of course, with so many students going to university today, the old system of grants and capitation is simply not sustainable. It was barely sustainable in the 80s. One answer is to reduce the number of places; it will certainly reduce costs and make employees wih degrees more desirable. However, it will also mean that access to degrees is going to be less likely for working class students and there will be a large cutback in employment at universities. With fewer students, fewer lecturers and administrative staff will be needed. Somehow, I doubt that this will be a politically acceptable solution.
One simple thing might be to have a single authority which sets standards for degree courses. This would remove the perceived conflict of interest with universities being paid by those to whom they award degrees. If an outside body judges the students, there is no conflict. Admittedly, with the coalition's "onfire of the quangos" I can't see that this will happen either.
So the UK is faced with a higher education system which is a) becoing less and less fit for purpose and b) becoming more and more inaccessible to students of modest means. My daughter is starting to look at universities to go to when she finishes her A levels. The advice I'm giving her is to look at those in the Netherlands. Aside from it doing her good to live abroad for a few years, the quality of tuition is as good, the degrees are less likely to be perceived poorly and the fees are a lot less.