"While I agree about your points I still maintain that a couple of courses in data structures and algorithms is a very good investment of your time."
Maybe a good investment of your time, but not if you are going to just be building websites, that would not be a good investment, the returns on that investment would be small.
"In algorithms you learn how to construct loops and programs that run faster than they would otherwise. For instance, think about how much faster it is to search for something in a sorted list than in a unsorted list (its log vs exp if its a nested search)."
Do you even do any practical web programming? Unless you are hitting a amazing load on your server this would never come up. Also, if you are digging into these details you better have a good reason because there a good chance of creating bugs or overloading your web box. However if you keep it basic, and just scale horizontally, which you don't seem to understand web hosts can do, its a much better use of resources.
"Processor architecture because you want to know where those bits go, if you dont, how are you ever to truly understand pointers, variables and data structures?"
I've been in web development and scripting for 15 years, can you show me where these "bits" are, I must have misplaced them.