Formal vs. Informal IT Education

Now thats an old dilemma.

Formal education will give a firm standing and basics to the student.

But theer are various subject like hacking which can not eb taught but need to be explored and learnt.

There are a number of IT colleges in India who are churning graduates with theorotical background who are ultimately unemployable.

So what needs to be done is that education should be linked to experience.

A high schooler who could install windows 7 is better than a BE C.Sc who doesn't know much about Vista.

Also curriculam at colleges lack currency.

Those who read journals in the subjects like IT and management may be very forward in their knowledge compared to BE's or MS IT of many universities.

But people without formal degrees are looked down upon, and not easy to get a job.
So what do you think?