Is a PhD really required to teach?
You're asking a question to which you already know the answer (no, a PhD is not the real measure of someone's qualification as a college teacher) but to which you offer no alternative.

Many other professions have the same kind of requirement: Lawyers need to pass the bar exam. Doctors need to go through residency and pass exams. Engineers need to be licensed. None of these formal qualifications are good matches for all aspects of a professional's job profile, but they are sort of the best anyone can come up with to ensure some kind of measurable qualification.

In the case of professors: For better or worse, professors need to both do research and teach. It may be true that a PhD primarily measures quality in the former, but teaching well also has a component of actually knowing the material and having a PhD is a reasonable assurance that someone actually understands the stuff they teach. Of course, it would be good if professors had more pedagogical training, but the same would apply there as well: How would you ensure that a candidate for a job has that training? By asking that they have taken a course and can produce a corresponding certificate? One might in that case point out that there, too, are many ways to accumulate pedagogical knowledge and that asking for a certificate is erecting an unreasonable bar in the same way as you suggest with the PhD.