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The problem is that what people need in the environment we live in (i.e. Capitalism) is monetisable skills, whilst often College Degrees, whilst teaching people things that are very hard, if not impossible, to learn elsewhere, do not in fact provide people with monetisable skills. A good example would be most Arts Degrees. I was lucky that my natural inclination was towards Science and Engineering and that I had a knack for Programming, but had I gone done the other direction that I had a bit of a knack for - Acting - my life would've been totally different (judging by some acquaintances of mine from that world, it would've been a way way harder life in the financial sense).
As for the hiring people from third world countries, in the case of India (if that's one of the ones you mean), having had several colleagues from there and from talking to them it seems that whilst indeed most people don't even have basic computer literacy (I'm not even sure if being able to read and write is something that a majority of people can do there), there are people that do have access to the same stuff as in Developed Countries (at worst they just pirate it) and even though they're a small fraction of all people, in a country with so many people it still adds to a larger number. Companies abroad aren't hiring the poor countryside illiterate people who can't even speak English (I believe most people in India can't), they're hiring the Middle and Upper Middle class from over there and given the massive, massive inequality there, those did have access to modern computers and software.
Same thing would apply to places like South America - lots of poor people who are totally computer illiterate (often just plain illiterate in the general sense) but a minority did have access to all the same things as in Developed countries - most having maybe not as powerful computers and using mostly pirated software, but still the same stuff.
That said, I totally agree that college degrees shouldn't be required for many positions they are required for nowadays. The degrees there aren't really required because they teach things needed or even useful for those positions, they're required because there's an imbalance of offer vs demand for those jobs (too many candidates, too few jobs) so those hiring just put that requirement there because "we lose nothing from doing it and, who knows, maybe the degree will come in handy at some point" plus they're kind of an easy way to thin the applications.
If the job market was tighter demanding degrees for jobs not requiring them would stop. And, yeah, at least in certain areas the mainstream parties helping out business interests by giving away work visas like confetti is the reason why the job market is not as tight in many areas as it would naturally be.