Very few people argue that designers should learn how to code (as in programming). What most people argue though, is that WEB designers should be able to code, as in do the markup and CSS, their own designs. If they aren't able to code their own designs, how can they know the limitations imposed on their designs by current (and old) technologies?

A designer does not need to know how to do AJAX, jQuery animation, MVC, Ruby (or Python, or C#, or Java...), an SQL dialect, Linq queries, how to configure nginx to serve your statics, and a whole plethora of things that are important when creating a product for the web. A bunch of different people and skill sets are needed for all of those, and no one person can wear all hats. That being said, a designer that designs for the web needs to know the medium on which they're creating their artwork on. I do oil painting, and I know I need to know how to frame my canvas with a stretcher or strainer. I know that I need to prepare my canvas with animal glue, chalk, and white lead paint. I need to know my brushes and their properties also, wether they're made hair from a horse, camel, squirrel, sable, etc... I need to know a myriad of different things that are NOT actually painting. I'm also an avid strength training aficionado, for which I've learned more about the human physiology and the mechanics of lifting weights and their effect on your muscles and nervous system than I care to remember. I need to know a myriad of things that are NOT how to lift weights correctly. If I'm a web designer, and I make pretty pictures for the web, I need to know my medium. I need to know how to code my own markup and I need to know how to make my own CSS. Only then will I know the limitations and the mechanics of how a "webpage" works. Hell, creating a good creative design is a lot harder than doing the markup and CSS to be delivered to a front end developer who will probably end up changing a lot of it anyways.

The point of web designers knowing how to do their html and css, is not to remove another person from the conveyor belt of web products. The point of designers knowing how to do so, is to make sure you've got a design that works beautifully and that goes hand in hand with all the standards and best practices that the project requires. If I'm going to hire a web designer that doesn't know how to do his own html and css, I immediately think that he's not really a WEB designer and that he doesn't really care to be the best he can be as a WEB designer. Regardless of his actual skill as a designer, and of course, I won't hire him. If I get a designer that doesn't know how to do so, but wants to learn... I'll probably hire him because of his attitude and aptitude for learning. As long as he's actually good as a designer of course.

I'll just end this already too long post with one 'though': Valve (as per the latest articles going around the web) hires mostly multi skilled people, as opposed to people that are one trick ponies. The developers to my sides (no I don't work at Valve) are both completely multifaceted people with a myriad of skill sets not directly related to making software, but that we use almost every day. I consider them some of the best I've ever met. I've done system admin in linux, bsd, and windows, and I'm pretty knowledgeable in all three. I've developed software for the past 15 years. I've also been designing for the last 10. I'm pretty decent (and I've studied and practiced my ass of to get to that point) in all those fields, but you can't be bothered to learn HTML and CSS so you can make YOUR web designs better? Give me a freaking break.