I think it is a bit reductionist to say (2) can "do a business IT degree or something". Taught CS today - at least at UK universities - is a mix of discrete mathematics, electrical engineering, and software engineering.

I think it comes down to the age old debate as to whether a degree is supposed to prepare a student to roll into an industry job or whether it is supposed to be an introduction to academia. An academic purist might argue that these should all be separate degrees because they are different intellectual pursuits, while a company would likely much prefer to take on a graduate with some understanding of all of the above.