It's not dumb, it just hides a cynical compromise. Companies need to wade through tons of applications, young people want a path through which they have some degree of certainty (pun semi-intended) that their work will lead to social capital + being with other people their age in a common setting. The college experience leaves no one very satisfied but many chunks of society tolerably satisfied.

Of course, the social contract is weakening and a new compromise will have to be found. That may simply be the broader acceptance of online degrees and certificates.