The recent abrupt departure of the MIT admissions dean provokes many thoughts, some silly ("Not the type of admissions she was supposed to make!") to the serious. But one thing which it certainly underlines is the limits of degrees as indicators of ability.
I by no means condone Marilee Jones' resume stretching. I remember near thermonuclear conditions when once someone nonchalantly described a third party's intent to obtain an advanced degree (I think it was a doctorate) through a mail order college. I worked hard for that sheepskin! I sacrificed! I suffered! Thou shalt not claim degrees in vain!
But, degrees have at least two relevant properties. First, they are a symbol of hard work and achievement. Second, they are proxies for ability and knowledge when attempting to hire someone. Ms. Jones never did the work or made the achievement, but she certainly demonstrated the aptitude to carry out her position. She was apparently widely recognized as a leader in her field.
It is less common than it once was, but some companies still require certain degrees for certain positions. In some cases this is completely defensible (could you take seriously a medical director lacking a medical degree?) and perhaps even legally mandated (is there any position that legally requires a Ph.D.?), but too often this is the lazy way out of real thinking. Degrees are important, but the level of effort invested varies. There are many talented persons who are perfectly capable of earning an advanced degree, but for one circumstance or another never did -- and some of them have gone on to Nobel Prizes. On the flip side, there are persons who no longer exhibit the qualities of a Ph.D. or M.D. -- persons who make you wonder how they got there in the first place. Even persons brilliant in one area can be completely off the rails in many others -- e.g. William Shockley.
I believe that one mark of an intelligent organization is an ability to look beyond paper qualifications and look at real achievement. My previous company had an ongoing tradition of this. When the big sequencing center was being set up, they didn't demand a Ph.D. but rather handed the job to someone who had shown previously (in academia) the ability to get things done -- he did & went on to found a successful genomics company (Orion). Even near the end of my tenure there were research associates being promoted to Ph.D. level titles ("Scientist"), because they had demonstrated the creative thinking and scientific leadership which are the true requirements of that grade, not the piece of paper.
Hiring people is hard & sucks up lots of time. Degrees are a useful shortcut, but one should never forget that shortcuts aren't always the best idea.