There is a huge crowd that has a degree plus whatever experience you have. They don't consider it losing out, because no one would when you would see the sheer number of applicants along with their experience/degree.
This one, for example, has been up since June and has been included in the CouchDB "Weekly News" since then. Seems odd they've not filled the position and that's part of what got me wondering about this:
https://stackoverflow.com/jobs/142140/code-monkey-web-applic...
Nothing would make them think that and that's obvious so the real question is "why do they think that?" because the fact is there are a lot of great programmers that never got a degree.
The answer to the 2nd questions is to find someone who can actually do it. If you need a real world example look at Apple Computer.