I believe the person was saying that in academia, literally everyone has a PhD, by definition since it's a requirement for the job, so the simple act of having it means nothing in the context of all of the other people that have it. It of course means a great deal since it's what let's you in to the room in the first place. Imagine interviewing 50 people, every single one of whom have an internship on their resume. What they did during their internship matters of course, but the simple act of having had one doesn't differentiate (matter).

I find it rich how fast you are to jump to destroying the entirety of academia in one stroke. It's quite easy to say things we don't understand should not exist, of course I'm guilty of this myself from time to time. Have you done education beyond the bachelor's degree? It's a very different world.

I think they mean that a phd doesn't mean much relatively speaking, since everyone around has one so it's less impressive and you're less of an expert when everyone around you is knowledgeable in the same domain.

Who does or doesn't have a PhD isn't terribly important in the scheme of things. Inside academia, the job market is highly competitive, and no-one is getting a job just on the strength of a cookie-cutter PhD thesis. Outside academia, it mostly makes no difference to anything whether you have a PhD or not.

If we apply your criteria, I'm not sure if any universities would be left.