One of the functions of computers is to provide entertainment or evoke positive emotions. Many people use computers to explore and consume art. The reality is that people value how things make them feel. Even outside of entertainment, design and form can improve function when done right.
Sure, bad designs that inhibit functionality are bad. But good design that enhances it are better than no design, so removing good designers from a pipeline is a bad thing.
In my opinion, products driven entirely by developers with no design sense are just as bad as those driven by designers with no development sense. The solution involves good teamwork between both parties.