Funny that this is mentioned; I was thinking of a related problem yesterday. The problem of the value of important degrees crashing down. It comes down to the teachers' and the schools' fault even though they seem honest. The problems mainly are:
Dumbed down material. Easy homework. Easy quizzes/exams. Grade curving. Too much helping the students.
I agree that not everyone is meant for college. I am double majoring in Aerospace Engineering and Mathematics and I simply cannot stand how the material is sacrificed and the lecture speed is destroyed due to "making sure the average student gets it". Some teachers use a gigantic curve to ensure just about everybody who had two brain cells passed, when without the curve they should just have let 3 or 4 people pass with an A, and about 30 out of 80 actually pass the given course.
It is done everywhere. What happens next is that a lot of people who shouldn't be graduating because they don't seriously understand the beauty of the material (you know, the people who want only simple concepts and then say math and theory are useless because they can't apply their dumbed down theories of the world) are actually graduating.
This is not only gravely unfair, it is also very inefficient as the people with actual serious mental capacities may not have as many contacts. Because there would be less people graduating into the field, the people who would graduate would be in far greater demand, and as such they would have a higher salary. The job done would also be of a higher quality.
University needs to be a place of challenging learning and creativity. Either you get it or you don't. If you don't have the minimum intelligence required to solve the tasks that should be demanded, you should not be going into college. All the "practical" people shouldn't be in college if they don't really want to learn. If they just want a job in their "practical" field, they can do a trade or shut up and study.
My immediate suggestions to teachers would be: Drop curves and make the material harder.
