I think in our current workforce environment that a college degree is very necessary to get into higher paying jobs, I think that overall a college degree will get you called in for an interview but your personality and more importantly your work experience will be the key driver if you get the job or not.
Yes, people need college degrees to get better jobs. In today's job market, competition for employment is extremely tough. In order to get the job, you need to have something that sets yourself apart from other applicants. In many cases, having a college degree will only get you on the same playing field as other candidates, so without a degree you would not be considered.
I think a college degree can make a big difference for a person if it is in the right field, or namely a field that is booming. In small rural areas a degree may not make a big difference as far as total income, but in large urban areas where there is a lot of competition, a degree should be considered a requirement. Make sure you're studying something that will lead to a job in your field though.
Better jobs do not always require a college degree, but it certainly helps. When faced with two candidates, one with a college degree, and one with 2 years experience in that field of employ, employers will often choose the degree holder. The degree holder has dedicated 4 years (presumably) to earning this achievement. Often they graduate with managerial skills unlike their in-field counterparts. Companies want to hire people that have the ability to advance, but the patience to wait in a lesser position.
While getting a college degree helps a person get a better job, I do not think that it is something that is a necessity. I think a lot of people can get a better job as long as they take the effort to look for one and think outside the box.