Totally agree. Selingo's book College (Un)Bound makes a very strong case of this and strongly advocates that we have to move to other forms of certification or other ways for students to demonstrate learning. He makes the argument that colleges need to unbundle their services/curriculums more.
Well, true and fair enough, but will employers accept it? That's harder to say because many employers seem stuck on that piece of paper and see it as a way to weed out the pack of applicants today.
There is some movement back to apprenticeship training in some fields. No one wants to pay for health benefits or a pension, it seems. If an employer can hire someone without doing so, they will. In this respect, some employers are more willing to hire the kid without a degree if they can train them easily. Alternatively, if an employer can grab the student interns who will work for free or credit, they will.
I'd love to hear how many companies are using a revolving door of student interns to function and get around labor laws. That's a nice dirty secret in many college towns or big cities like NYC. Some places are flooded with interns.
