The “knowledge factory” exists for a reason. The way our society is constructed, we need structured specialization (pick a course), verification (you’re OK) and rating (you’re the top 5%) — because our entire society expects these things to work and be available.
It sounds like the only difference in your example is that these things exist but are not centrally verified to be identical, because apparently diplomas themselves are the problem.
People need to be able to improve, be excluded when incompetent and rewarded when excellent, because that is how our society works in all other aspects, and the one thing that will always be true about an educational system is that it will mirror society: and if it doesn’t currently it will in a few decades.
You cannot suggest fundamental changes to an educational system without more or less advocating a revolution in society. No wonder most complaints stop at the problem and never continue to proposed solutions.