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RE: Should we punish our children?
You are right. Unfortunately this situation is so deeply rooted in our culture that it would be extremely difficult to completely remove children from it. Even if you have incredible skills and knowledge, without a degree no one would be willing to give you a chance. Home-schooling children and keeping them away from media and cities could help, but it puts them at a disadvantage in later life when they have to join the rest of the world.
There are certain communities that live a self sustained life. They are doing it. Have seen a few videos online.
However, almost none of the rich n famous have had a degree (some took after they became rich n famous) starting from Albert Einstine to today, they all left schools/collages, just followed their passion, already gave some examples above. Collage/schools never let u think out of the box, and you can see now where they are.
In India, read about the "Dabba Walas" today he is being offered to give speeches at Harvard, IIM's, etc. which are the biggest institutions in the world, he is not even 10th grade.
However there are many doing this and have done it, they might not be super rich and famous, but in their fields, they are well known or doing good enough. As unfortunately , today the only definition to success is material wealth.
You should watch this movie "3 idiots".