Degrees, especially from prestigious schools, have become a kind of writ of noble title that can be purchased. Systems like that can be very sticky. Everyone who has one has a vested interest in preserving their value (like taxi medallions) and HR people can easily use them as a shortcut to hiring decisions that they'll never look dumb for making. The latter is the "nobody ever got fired for..." effect.
The only thing that will break this is if demand for labor exceeds supply, forcing employers to hire outside traditional parameters.
The only thing that will break this is if demand for labor exceeds supply, forcing employers to hire outside traditional parameters.