I've seen the insecurity of some of my colleges without degrees, almost like they think college is a mystical place where deep and unique knowledge is shared. That insecurity can really cripple your career.
I struggled with it daily as a self taught developer working at a large company. I eventually dropped out of the workforce and went back to school because of it. I feel pretty awkward now as a 30 something in class with freshman, but the satisfaction and confidence of having that piece of paper seems worth it to me.
I'm not sure this is the case. A lot of employers probably just require a degree because they get so many applicants and it serves as a lazy filter.
On a practical level it also shows that a given applicant has the tenacity to power through a long term plan and come out successful.
Supposedly a degree is also signal of critical thinking, but this has not been my experience with people at all.