The reason why a bachelor’s degree on its own no longer conveys intelligence and capability is that the government decided that as many people as possible should have bachelor’s degrees.
There’s something of a pattern here. The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely more people go to college and own homes, we’ll have more middle class people.
But home ownership and college aren’t the causes of middle class status, they’re markers for possessing the kinds of traits – self discipline, the ability to defer gratification, etc – that let you enter, and stay in, the middle class.
Subsidizing the markers doesn’t produce the traits, if anything it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers.