A degree also proves that you were able to stay dedicated to something for ~4 years without giving up. There is a lot to be said for showing that kind of commitment to a goal.
I'm not sure that is it. I have dedicated far more time than that to other endeavours, but I can likely count on one hand the number of employers who would actually care.
I think the reality is just pack mentality. At some point, one successful business only hired those with degrees, and everyone else adopted the same policies in attempt to duplicate their success.
