An incompetent degree holder will obviously cause more harm then a competent non-degree holding teacher!

My impression well is that the picture of incompetent degree holders vs. that of competent non-degree holders is something you may need to satisfy your own ego.
Why? I think you will know the answer.... This part of your input is only partly true, I think you know that. Please be careful not to generalise....

A degree is certainly not a sign of competence when you talk about English teaching!

As far as China is concerned, that may even be true to a large extent. But for the better jobs, there are formal degree requirements. So, what will you do when looking for a better job in case you do not meet that requirement?