All the posts and forum comments I've read have said more or less the same thing -that until learning is valued for it's own sake as well as for employability etc, then all this is going to do is widen the divide between the decent schools and those like the ones I work at. When I make phone calls home to parents - the majority of whom are supportive - I still hear (not these exact words) "yeah, but it's not as important as Maths or English." The SATS have drilled it into pupils AND parents that those are practically the be-all and end-all. Now, given this report about the number of boys who leave primary school with the literacy skills of seven year olds - of course English is important, as without a decent level of literacy they can't access the rest of the learning - but as any English teacher will tell you, "English" and "Literacy" are two different things.
We need to STOP trying to get all kids to do the same things. To be honest, it's pretty much a waste of time trying to get half the kids I teach to learn French because they struggle with English to start with!
But as usual, economic factors are in the driving seat - we have enough trouble recruiting and retaining English teachers as it is, without taking out half the kids from MFL to do extra!

And you're absolutely right - any employer is well aware that a BTEC Diploma in PE is NOT the same as 4 GCSEs... and what use is 4 GCSEs in PE to someone anyway?!