1. As a hiring manager you should be better at differentiating between people and treat a degree as just one data point that you take into account, and not as a filter that gives no false positives.

2. You're pointing out that self-educated people aren't worth the risk and then you go on to advise him that he should self-educate.

3. A point that I think you're kind of making and that I agree with, is that a degree is a signal that you've gone through a certain process of education. If you don't have it, then you'd better signal the same thing in a different manner and demonstrate that you're familiar with theory, best practices, design patterns and so on; and that you can stick with something for a continuous period of time (showing up and doing at least the minimum amount of work for 4 years isn't a signal that all candidates have).