On the flip side of this, many of the most capable and intelligent people I have worked with had no degree (or a non-CS one, e.g. fine art is particularly common), and when I try to think of times my algorithms, OS, networking, maths, or even data structures courses have been directly beneficial to my daily work, I have little to show.

Those all had knock-on effects and have indirectly made me more capable and confident in my analyses of performance or occasionally in troubleshooting, but it is very rare that I spend a day doing something deeply theoretical, and it is conversely very common to spend days hitting my head against walls with configuration, integration, or versioning of build/deploy/test components and dependencies. My CS theory is no good there, only methodical troubleshooting and asking for help in IRC are effective, and anyone can learn that by doing.

Yeah, I'd agree with this. You see it play out in interviewing when the "academics" ask questions that are quite useless in determining whether or not someone is qualified to build a web app.

It's as if interviewers are just stroking their own ego trying to recreate the relationships they encountered in academia only with the roles reversed.