HR still prefers somebody who went through the trouble of getting the paper as it signals putting the effort in.
Now many jobs that previosly didn't need university education have such applicants and it becomes more mandatory to get one in order to compete. And why would you not, it is free after all.
In the end more people get higher education. it won't necessary help you getting a better job but I think it is good for society anyway.
For many others this "useless over education" is one of the reasons to introduce fees to schools. To make vocational studies worth more again and force people to think education more like an investment.