Accrediting agencies are part of the problem, as is the federal oversight you discussed. Such things are inherently bureaucratic. That's a difficult concept to explain, really, but I'll try it with an analogy: A fence at the zoo is not meant to keep the animals in as much as it's meant to keep the people out. Similarly, degrees, issued by universities and given their stamp of approval by accrediting agencies, are not meant to reward the efforts of the person who earned the degree so much as they are meant to segregate out the people who did not earn that degree from any academic discussion.
The problem is that some of the smartest people I know don't have degrees.