I really don't intend to be an apologist for MFA programs, but since the late 70s I've heard over and over the same basic critiques that are either extremely general or that misplace too much emphasis on the centrality of MFA programs in American arts and letters. From Donald Hall's disgust over the McPoem (which I think he's written more than his fair share) to Hayden Carruth's bemoaning of the Iowa "Wrackship" (and Carruth is one of my heroes), to current venemous treatments found in the New York Times and the Foetry web site, these criticisms miss the mark, locating the demise of literature and literacy to these programs.
I want to be very clear here. I think you can be a great writer and never trod a step in any higher education institution. You don't need an A.A., B.A., B.S., B.F.A., M.A., M.A.T., M.Ed., M.F.A., M.B.A., M.S., Ph.D., D.A., D.B.A., Ed.D., M.D., J.D., D.D.S., D.V.M., or any kind of sheepskin to be a great poet. And I would not argue that there is an exact correlation between attending an M.F.A. program and becoming a better (or worse) writer. The argument for the M.F.A. is really individual, about whether or not you want to take 4 to 6 workshops, perhaps 4 literature classes, perhaps take 2 courses in a language, hang out and work with (and maybe against) a dozen to thirty people, read all kinds of literature, attend readings, maybe teach a composition class or two, maybe teach a creative writing class, maybe work as a writing tutor in the writing center, maybe work as an editor at the literary magazine, and then leave with a degree that does not guarantee you any kind of career advancement, that has no real pragmatic ends, after two to three years, then it can be a great, refreshing experience.
For some people, I know that the M.F.A. experience was an unmitigated disaster (could say this is true for any post-graduate degree, of course). They attended a program where it was a hostile, cut-throat environment, where one learned the skills of basic political survival: backstabbing and sucking up. Of course, you can also work in a bank or a co-op organic foods store with the very same dynamics. I also know that the M.F.A. program can be a location of creative group-think, where you have a bunch of like-minded poststructuralist, post-Language, neo-New-York-School, avant-dadaists all gathered together and praising their numbingly conformist works. But I think that happens, has happened anyway (The Fugitives come to mind, so do the Martian Poets, etc.), with or without an academic institution.
To be a great poet, yes, you must read (and I recommend reading far more broadly and deeply and imaginatively than what Prose prescribes), but I also know many poets are social critters, wanting to group, share their work, argue, and disband. An M.F.A. program is one institutionalized and artificial means for that kind of gathering, and that is a good thing. But, of course, there are other gathering places, such as Poetry Thursday, that are every bit as valuable and celebratory and right, and maybe as pointless.