(Brilliant people for sure, but that hasn't saved them from a suspect business model)
[Startup X] does not need a CMU PhD to build the latest Node app. The domain is blocked at my office so I can't read the article, but I'd argue that spending the extra money on "10x" talent does nothing but shorten your runway.
If the premise of the original article was correct though, you would expect that the uncredentialed people who made it past the hiring bar would be far stronger than the people who got an unjustified boost based on their credentials and the prejudices.
If it's true that easy-to-measure academic credentials are basically uncorrelated with job performance, then that's probably a good indication that their hiring process actually is well-calibrated: if people with poor credentials were doing better than people with good credentials, then their hiring process isn't giving sufficient weight to non-academic factors. If people with good credentials were doing better than people with poor credentials, that would indicate that they were putting too much weight on credentials and could improve hiring by weighing other factors.
X: Hired by google, good grades, good school.
In fact, it doesn't test the difference between institutionalized tertiary education vs a lack of it, only differing academic performance among those who are already relatively successful in it.
While reading "In the Plex", one fact stood out: nearly all of their early hires were well-respected CS figures from 1st grade universities. Not only you had to be smart, but you had to have good grades from a good school to get hired by Google early. The only exception I could find was Salar Kamangar. At least that was my impression from reading the book.