Employers want the degree because it's supposed to verify that you have a certain set of knowledge and/or skills, or at the very least, you're capable of thought to the extent required to get that degree. That's the only reason they want it.

Student being unable to unwilling to learn that knowledge or acquire those skills should mean they don't get that degree, they don't get those jobs, and they go work in fast food or a warehouse.

"Just give them the degree" is quite literally the worst possible solution to the problem.