We need people who have been exposed to different ideas and know how to think critically and express themselves.
We also need advanced vocational training (e.g. in engineering, business, and applied art)..
These are two different needs that are not always both (or either) satisfied by college. But it's safe to say it works for some people. It is still theoretically possible to become an architect in some states through a ten year apprenticeship, but the paths to most advanced professions include a bachelor's degree somewhere along the way: engineer, physician, lawyer, teacher, accountant. The kind of person who successfully becomes a well-rounded autodidact will do even better if he can find a school that caters to his type of thinker.
The fundamental problem with higher education is the model is medieval. Five hundred years ago a gentlemen could go school for a few years as a young man, purchase a library on his way back home and spend the rest of his life surrounded by as close an approximation of the sum total of human knowledge as one can wish for. Modern higher education should probably be life-long.
A lot of what they try to teach you in a liberal arts education is wasted on the young anyway. Trust me, when you're forty you'll be able to appreciate what a great book has to say about the human condition a lot more when you're forty than when you're twenty. Think of it as something to look forward to.
Vocational knowledge needs continual touching up too, but beyond that people should strive to become ever better-educated in general throughout their lives, a task that universities aren't particularly engaged in. It seems to me a foolish oversight, since once you graduate as a 23 year-old they spend the rest of their lives trying to finagle their way into your will.