Interesting question.
People mention transferable skills, which undoubtedly there are in a law degree, but I doubt it has more transferable skills then several other degrees. Hell, I'd be confident in saying a law degree has less transferable skills then the Business & Management degree I did to be quite honest, yet I don't doubt law is the more prestigious. Economics is one that always springs to mind for me when I think about 'transferable skills'.
No the truth of the matter in my eyes is Law is oversubscribed because of reputation, not course content. There are those that want to be lawyers, and there are those that want to say 'I have a law degree'. The degree does have a very strong reputation, can't argue with that.