This is an argument that engages JOs in constant debate, it was certainly very alive 17 years ago, when I was one of those fast-streamed graduates. The fact is that having a degree doesn't mean that you are more intelligent than a specific person who doesn't have a degree, but it does mean that you have provided proof that you have a certain level of intelligence, which a person who has not taken a degree has not proven in that same way.
A degree from a UK University is a reasonably standardised indication of a level of academic ability, an ability to absorb and apply information, as well as a maturity in managing one's life independent of home etc.
The fact, from the employer's point of view, is that people with degrees do substanially better in training than those without. Of course, the hypothetical that those people that don't have degrees and who still succeed in their RAF careers are just as intelligent as degree holders, just chose a different career path, is perfectly possible - the critical difference is thay they haven't proven that fact and can't prove it until many years into their service.
The RAF affords benefit though increased seniority to those that have proven their level of intelligence, rather than those that cannot provide that same level of proof. It is nothing to do with how intelligent you are per se, it's a calculation based on years of measuring training risk, based on initial proof of academic ability.
I would never suggest that because I have a degree that I am cleverer or brighter than the next officer. However, at the early stage of a career, my degree certificate did offer my employer the indication that I was less of a training risk than someone without one.
I hope that explains the apparent 'degree prestige' held during the application process and in the early years of your service. Rest assured, 5+ years into your career, it won't make a fig of difference.