2. Setting up such a program would go a very long way towards diminishing institutional distinctiveness, for doing it on a large scale would essentially result in a universal core curriculum.
Why would it have such an effect? Schools recognize each other's BA/BS degrees, and that hasn't created anything like a core BA/BS curriculum. Community colleges all grant AA/AS degrees, and that hasn't created anything like a core curriculum. So why would such an effect materialize if four-year schools granted AA/AS degrees?
Again, this is going to vary by state, but several states DO have a standardized core curriculum for all intents and purposes. Associate degrees intended to result in transfer to a four-year school are limited in the number of credits they can require because universities won't take more than a certain number in transfer. When my department designed its AA in English, we had grand ideas about requiring certain courses that we thought would be beneficial to those planning a four-year degree. The committee working on the project learned pretty quickly that they had extremely limited options in terms of specifying coursework because the core is set, as is the maximum number of hours. If four-year schools granted associate's degrees, they would essentially be duplicating the services of CCs in my state.
Now on the other hand, a new trend we are seeing is the addition of four-year BAAS degrees at the CC level. This is an area most universities won't touch because they don't have the personnel to handle the curriculum. My CC does not have one of these yet, but I think we are headed in that direction in our protective services department. One of our sister CCs in the district has put in an application to do one in either hospitality management or culinary services.