Sorry if the answer is little long but I think it provides an opportunity to address some common issues which others may find of interest. I am not commenting directly on your personal circumstances.
Many IET members have progressed their careers and gained professional registration via OU qualifications. Historically the degrees weren't formally accredited because they didn't fit the prescriptive model of accreditation (a QA process). This was corrected a couple of years ago, but the accredited pathway within the OU is prescribed.
There are hundreds if not thousands of degree programmes offered by universities in the UK and overseas which could contribute to professional development or provide underpinning knowledge evidence acceptable for professional registration. A proportion benefit from formal professional institution accreditation and may therefore be deemed "exemplifying" under UK-SPEC. This status illustrates a "safe choice" and offers an advantage in any professional registration application.
The IET does not "require" members to follow a prescribed pathway to professional registration and various combinations of formal qualifications and experience are accepted on an individual basis. If someone is seeking Chartered Engineer then there is an expectation of "Masters level" knowledge. An appropriate MSc with strong technical content or a good BEng (preferably accredited) plus evidence of further learning at masters level (not necessarily a MSc) both offer good evidence of this knowledge.
Choosing a university programme to invest in is like many other decisions, a matter of opinion. If I use the analogy of a Car, nearly all models offer similar utilitarian advantages (i.e. A to B in a similar time), many offer quite similar features which can be evaluated. Some offer more specific benefits, such as four-wheel drive (good if you live up a muddy lane) a prestige image (handy if you frequent wine bars in Alderley Edge), or even both (good for school runs in Chelsea)
I hope that any advice I have given is not mistaken as negative comment about the OU (I hold an OU degree myself) although you are entitled to comment based on your own experience. The general argument about academic "grade inflation" is a rather different one, It isn't an argument that I would want to pursue because we should be focussed on the present and future, not the past. Purely to provide perspective (particularly in the context of IEng) I might observe that the system of apprenticeships and part-time study (typically to HNC - but it could be a degree) has produced good engineers for a very long time. I await any evidence to support the proposition that studying full-time (nominally to a higher level) followed by actual experience produces superior results for most "mainstream" engineers. I think there might be a case at the more analytical, innovative and conceptual end of CEng work (e.g. R&D or strategic management). For this reason I would like to see far more high level technical apprenticeships, aimed at what I see as the "mainstream" IEng standard.
To return to the main point, I would nearly always encourage a practising professional to pursue a masters programme, if the opportunity presents itself. The following caveats apply, be enthused by the content and don't sacrifice opportunities to build your career achievements, as these are usually more important.
In my personal opinion the "best time" to invest in a masters is when you have gained enough experience to develop your own "expert" perspective and would like to challenge your thinking against other perspectives or by original research. The programme you mentioned initially looked promising with these objectives in mind. If the objective is primarily to gain CEng registration then also look at Engineering Council "Gateways" programmes.
The "Glass Ceiling" analogy is a good one, as the phrase developed to describe unfair discrimination and unjustified prejudice. Some organisations make CEng a requirement (or more usually "an advantage") for particular posts. Where this is being properly used in a well-calibrated way, as an independent benchmark of competence, this is an excellent idea. Although in a recruitment advertising situation the requirement might be intended to limit the numbers of applications to manageable proportions.
The possibility exists of "chicken and egg situations" where the opportunity to demonstrate CEng competence is only available by being in the CEng designated post, but it seems unlikely that an employer would block "the best person for the job". Problems can also arise from poor calibration such as a post being designated "CEng only" when IEng would be equally (or sometimes more) suitable. A further example of poor practice would be to impose a requirement (such as a certain degree) which isn't directly relevant to current competence. This sort of thing was normal in the past and I still see a few examples, but the IET assessment process is now competence based and recent anti-discrimination legislation applies. For example there is hardly anyone over a certain age with an MEng, or anyone under a certain age with 10 years' work experience, so unless you can demonstrate why such factors are directly relevant to current capability in the job, then potentially unfair age discrimination may occur.
Roy Bowdler IEng FIET FCIPD
IET Registration & Standards