Ooooh, I'm not surprised that that is a heated debate. A similar thought around design importance recently came up in a work yammer post that myself, and my work mate responded to in defence of design. All I will say is the term "sparkly" was used.
I would say that they also go hand in hand. For instance when you do rough sketches around interfaces things seem fine, but when you go to do more high fidelity mocks with colour and styling and content that you realise that these buttons all behave the same, and these buttons don't, that you realise you could have a fundamental problem. Should buttons be used in both cases, if so, they should probably look different if they behave differently etc.
The same is said of organising the content and hierarchy of information into digestible pieces that are easy to read and know where you are. If you have a website where all the information is crammed together, the buttons are all different colours, and there are no defining features to the text, you are going to scare away your users. It wouldn't be a very pleasant user experience at all.
I guess it also depends on your definitions of the roles as well. For instance iconography, could go to the designers, and this is very important! It could also be said that we design the user experience. For us, design also helps tie everything in to the brand guidelines, so it keeps in line with the business image and how they want to be portrayed.
So design is not just the lipstick, it helps make the experience good as well. Design helps pull in customers, even before they see and play around with features and the experience.
Just some of my thoughts.