I do however agree ethics are system dependent.
The effects of unethical behavior on the system are objective however.
Further, you're just completely discounting the agency of my customers here. They knew what they were doing, and how it devalued their education experience.
Failure is arguably an important part of the process of learning.
There's a thing that happens with loopholes. There's the guy that finds the loophole and tests it out for himself. Then there's the small group that follow him in if it suits their needs, and then word spreads and a good proportion of people also follow. If the loophole threatens the existing system in any way, then the upholders of that system will attempt to barricade the loophole. A few upholders might change the system itself, but that is rare.
The one guy who first used the loophole will always be on the lookout for new loopholes, and there's nothing you can do about it. You can say it's wrong, you can say it's not fair, but it's a fact of life. And by using that loophole that one guy can create change all around him. He can change it himself, or he can open the door for other people to see the change that needs to happen. Maybe it's good to patch the loophole, maybe it's good to change the system in which the loophole was found-- either way, it comes down a great deal to our explorer friend. He learns from failure too, but his goals are different and that's fine.
I don't think the issue is your disservice to higher education in general or grade systems as a whole, but to your customers, who never receive the education they were meant to, and that they paid for.