To me this looks like a loss of idealism and a move towards a market idea of what sorts of things make up valuable knowledge. It also seems like a real loss of something important.
A similar effect is happening in the US political arena where people are being called "-ist" for a wider range of transgressions than previously. Rather than increasing the political penalty for these offenses, the expansion of the terminology has actually weakened the associated opprobrium, because people think of being "-ist" as a less bad offense since so many more people seem to be doing it these days.
This applies to all rules that govern what we consider normal behavior.
When (basically) everyone is ignoring the insanely low posted speed limit the result is (basically) everyone driving the speed they feel appropriate for the conditions.
When everyone knows a few gay people nobody sees the point to criminalizing being gay.
A lot of people were STFUing because they were afraid of not being PC. Now that people are seeing people say even more extreme things than they wanted to say without being seriously punished they're saying those things too. Something good will probably come of all this but change is never easy or fun. It's unlikely that we'll return to a culture that accepts outright racism. Hopefully we won't continue to perpetuate a culture in which any attempt at having a frank discussion involving a touchy subject is not chilled by a fear of being name called as a BoogymanOfTheDay (e.g. racist, communist, etc).
How many colleges can you name off-the-cuff that you'd never hire from? Do you actively follow every college to figure out if/when they water down their requirements?
There is no information exchange other than the press and word of mouth for what you're wanting the market to fix. The other metrics, graduation rates and job placement rates, supposedly wouldn't be reliable statistics in your view.
In some ways I think it already has. I wouldn't look at a degree as a sign of fundamental competence and I don't think most other people would either. Maybe that's overly optimistic.