Degrees are less about learning than making sure you will do a certain amount of work for at least two years and more usually four, even if the work is dumb. So it signals intelligence and conscientiousness.

Having a degree tells people you're at least capable of being a member of the middle class. You're intelligent and biddable enough. Elite university graduates also got some implicit training in the social norms of the upper classes, and by virtue of the intense competition to get in you can be sure anyone who graduated from them is smart. More accurately, anyone they accepted, the dropout rate for top tier US universities is very low (except for Caltech).

And yes, people with degrees do think people without are dumber, and employers likewise, because its true. And alternative certifications for different modes of training/types of knowledge fall prey to the same problems. Having separate, respected educational systems, rather than one for the real people and one for the losers requires relatively low social mobility, or at least hard social mobility.

Seneca College sounds real cool.