
Agreed, it's a matter of trust (much like SSL certificates). X University says you passed their degree course.
I respect X University therefore, I know that you're at least good at something. And so long as you can prove yourself and show how good you are, you have fewer hurdles to jump in the interview process.
That being said, I have a Bachelors in Music. But I've worked at a few tech companies, founded my own (which I'm finishing with at the moment) and now have a decent job as a programmer, get paid quite well, not CxO well but well enough for my age and experience. Do I wish to have a CS degree? Absolutely. But hey, I'm young, and with the futher experience I've got now, I shouldn't have any problems in pursuing that if I need to in the future.
Real Users never know what they want, but they always know when your program doesn't deliver it.