I think that also depends. What makes you think that self-taught applicants can't learn compilers, distributed systems, or machine learning? If the candidate has proven the same amount of knowledge acquired during the interview, I'd definitely go for the self-taught one.

I think back to the best developers I've ever worked with, and one of them did have a Masters... in Philosophy.

I just haven't seen any correlation between skill and education level. Ha, with the exception of people who get a PMP... I've found them to almost always be bad at running projects.

Because that stuff is harder to learn on the web simply because of the lack of comprehensive materials.

For web development there is tons of resources on the web to learn.

The other stuff you really need to start reading books or academic papers. And it's useful to have someone to tell you where to start.