I think that throughout history many people have composed music without having access to formal instruction. The educated degreed musician is much more common and prominent in today's world. Think of the composers who "heard" entire symphonies in their heads.
Now, I have studied music to some degree. I can read music for drums and I can read guitar music. However, I can't simply read standard music sheets unless they're written for guitar. The guitar notation is conveniently placed on the treble clef because it makes reading it much easier. Otherwise, you'd have to go between the treble and bass clefs which would be a graphical pain in the butt. I don't know how many guitar players can read both ways but I assume the ones who frequent a forum like this one probably have that facility.
But more to the point of this thread: Does formal education help create a better musician? Certainly, it can and it should, depending upon the student's proclivities. I would think that they should have more technical dexterity. Think of the process of learning how to play the same chord or a different succession of notes in various positions on the guitar. Maybe a person could intuitively locate these positions but I think you'd have to be a genius. I would like to ask this question: Does anyone know of untutored geniuses who have demonstrated this ability? Was Jimi Hendrix able to do it? Also, think of muted notes and buzzing a note within a chord progression.
A possible downside of education (to my mind) is this: Many times I've listened to drummers and I immediately knew they were playing exercises they were previously assigned in drum classes or from various drum books. I recognized those patterns and realized they were trying to fit these exercises in the music they were playing or during solo time. Also, there is the phenomenon of guitar players shredding musical scales. Sorry, but this is not creative to me at all. It's just them trying to show how fast they can play them forwards and backwards. But this is not musical IMO and doesn't fit the overall song they're playing along to. Again, re: drummers: How many play rudiments when soloing? Just because they're good at some of these doesn't mean it makes for a good solo. But again, they're probably trying to impress the audience with their speed, loudness and endurance.
I also want to say that I've been shocked at how many drummers I've met who had no formal training but yet were in popular bands. I could tell in just a very brief conversation that they didn't know what I was talking about when I referenced various rudiments.
Overall, I think there was a bias against formal education years ago. Is this still true? It's just that a lot of musicians wanted the ultimate compliment which was: Look at him! He's amazing and he's never taken any lessons! I've witnessed this attitude among artists as well. They won't brag about their schooling unless they know they can top you. Also, some want you to think they're naturally gifted. It's like: "Hey, he's so special. He has an innate talent and we are in awe of that. We wouldn't be as impressed if we knew he had an art degree. Then, we'd simply expect whatever he produced."
For my personal opinion, I like the naturally gifted people like Paul McCartney who create songs out of thin air. I will always be amazed by that. If he had studied formally, maybe his creativity would have been inhibited in his desire to "play by the book." This leads to another question: Are you more likely to break the rules if you know the rules??