This is a very interesting question, for me the answer hinges on the goals of the institution and the objectives of the course.
If the priority of the institution is for students taking the course to sit and pass the exam, then this sets the tone for the course, then preparing the students for the exam experience is just as valuable as teaching them the content. Most students taking these kind of courses are goals-oriented and would probably judge the credibility of the instructor through the narrow lense of whether or not they hold the certification. Helas, there is a downside to this approach, as passing the certification exam becomes the most important goal and knowledge of the material and preparation for job roles becomes secondary.
On the other hand, if the focus is knowledge of the concepts (knowledge-based approach) and certification is just a validation process for students completing the course, a well-designed course or set of courses by a Phd, who does not hold the certification, can work. The issue will be the buy-in from and expectations of the students, especially if they are fixated on the certification. So, the approach would have to be clarified to the students from the start to make sure they are on board.
Another side point, that relates to what Greg mentioned, is whether or not you have to hold the exact certificate related to the course. I think that's not necessary if you have an equivalent or superior certificate from a different vendor. You can't tell me that somebody who hold a CISSP and does not hold a Security+, is not capable of teaching a Security+ course.
Great topic and discussion.
Best
-Moez
