The only place I've had that feeling that "education" was more important than knowledge in Cambridge was actually directly on the Harvard campus. But I completely agree.
There are two strains of culture in Cambridge, "you should be smarter" which is why I love living here. And "you should have two PHDs" -- which is very different and unfortunate message. It's almost the opposite of the Valley, which speaks so reverently of the Harvard drop-out.
The best thing that those of us who live in Cambridge could do is keep the culture focused on ideas and less on diplomas.
Wolfeboro, NH (smalltown New England summer resort): You should pretend it's 1962 like all the retirees do.
Waltham, MA (Brandeis University): Go back to NYC when you graduate.
Cambridge, MA: You should be more educated.
I chose "educated" over "intelligent" largely because I lived closer to Harvard. When I go to the MIT side of Cambridge I would switch the two. In and around Harvard you see a strong vein of people who aim for the prestige of higher education over the knowledge it brings.
The middle-aged people dream of sitting in a musky study debating high-falutin mish-mash over a nice port. The college-aged kids dream of sitting in a coffee shop debating their PHIL101 papers. They seek _established_ education.
I know this doesn't speak for every aspect of Cambridge, which I did love living in for a few years, but the too-strong emphasis on the appearance of education as opposed to the knowledge you gain helped me move to take a job in San Mateo (shameless plug: RockYou.com).
Disclaimer: I am not your average anything. My move to San Mateo from Cambridge is via Vietnam, Cambodia, and Thailand. I speak Mandarin but I'm English/German. Take what I said with a healthy grain of wacky salt.