How do colleges know if you're doing multiple degrees at the same time ?

[alzee]

I see far more utility in the graduate degree.

You might. Others might not. Why restrict their choices simply because you disagree?

I'm sure if a compelling reason were to be presented

Compelling to whom? It's obviously compelling to the person pursuing the degree, and their judgement should carry more weight than anyone else's.

But to get annoyed at an institution for not encouraging this is a bit silly.

I'm not annoyed that the are not encouraging it, I'm annoyed that they are actively discouraging it -- especially when the reasons for doing so are based on faulty logic or assumptions about "what's best" for an "average" person, as an "average" person isn't going to pursue a 2nd or 3rd degree in the first place.

Those that want to do so should be allowed to do so, period.