The doctorate-or-not discussion is roaring along in the comments to the last post, and they're well worth reading. I have a few more thoughts on the subject myself, but I'm going to turn off comments to this post and ask people to continue to add to the previous ones.
One thing that seems clear to a lot of people is that too many chemists get PhD degrees. I'm not talking about the effect of this on the job market (more on that in a bit) so much as its effect on what a PhD is supposed to represent. So, here's my take on what a PhD scientist is supposed to be, and what it actually is in the real world. I'm going to be speaking from an industrial perspective here, rather than an academic one, although many of the points are the same.
Ideally, someone with a doctorate in chemistry is supposed to be able to do competent independent research, with enough discipline, motivation, and creativity to see such projects through. In an industrial applied-research setting, a PhD may initiate fewer projects strictly from their own ideas, but they should (1) always be on the lookout for the chance to do so, (2) be willing and able to when the opportunity arises, and (3) add substantial value even to those projects that they themselves didn't start.
That value is both creative and managerial - they're supposed to provide ideas and insights, and they're supposed to be able to use and build on those of others. They should be able to converse productively with their colleagues from other disciplines, which means both understanding what they're talking about and being able to communicate their own issues to them. Many of these qualities are shared with higher-performing associate researchers, who will typically have a more limited scope of action but can (and should) be creative in their own areas. Every research program is full of problems, and every scientist involved should take on the ones appropriate to their abilities.
So much for the ideal. In reality, many PhD degrees are (as a comment to the previous post said) a reward for perseverence. If you hang around most chemistry departments long enough as a graduate student, you will eventually be given a PhD and moved out the door. I've seen this happen in front of my eyes, and I've seen (and worked with) some of the end results of the system. The quality of the people that emerge is highly variable, consistent with the variation in the quality of the departments and the professors. Unfortunately, it's also consistent with the quality of the students. But it shouldn't be. The range of that variable shouldn't be as wide as it is.
There are huge numbers of chemistry PhDs who really don't meet the qualifications of the degree. Everyone with any experience in the field knows this, from personal observation. You will, I think, find proportionally more of these people coming out of the lower-quality departments, but a degree from a big-name one is still far from a guarantee. The lesser PhD candidates should have been encouraged to go forth and get a Master's, or simply to go forth and do something else with their lives. They aren't, though. They're turned loose on the job market, where many of them gradually and painfully find that they've been swindled.
Over time, the lowest end of the PhD cohort tends to wash out of the field entirely. There are, to be sure, many holders of doctoral degrees in chemistry who go into other areas because of their own interests and abilities. But there are also many jobs that make an outside observer wonder why someone with a PhD is doing them, and that's where many people end up who shouldn't have a doctorate in the first place. Others, somewhat more competent, hold on to positions because they're able to do enough to survive in them, if no more. While there are plenty of bad or irrelevent reasons for people not to be promoted over the years, some cases aren't so hard to figure out.
Those, then, are my thoughts on the doctoral degree. What can be done about this situation, if anything, will be the subject of a future post. I have another set of opinions on the Master's degree and its holders, which I'll unburden myself of a bit later on. Comments, as mentioned, should go into the discussion here.