Might be an unpopular opinion, but I couldn't agree less. It's not a choice between "theory" and "practice", it's a question of depth of understanding.
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Personally, I think previous work / contributions to open-source projects, etc. outweigh any diploma for CS. There are some minimum standards one could assume someone meets with a diploma, but the field itself is constantly changing and evolving so a degree by itself doesn't
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give a complete picture of that person's capabilities / accomplishments, etc.
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A colleague once commented, "I don't get what's so special about CAP theorem, it doesn't seem that important", another colleague replied, "It's important because we don't need to talk about it anymore". Theory is just an expression of ground truth we can all agree, and build on.
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Theory is good to know but it's also important to know based off experience when it is appropriate to move away from a specific theory or best practice. I agree with you 100%