The ad hominem hyperbole turned me against your much simpler - add moral hazard - argument. Do tell, which universities provide this degree in basket weaving that you denigrate? Sure, you may have drawn on this often invoked mythical degree as a standin for courses of study that you see as useless and valueless but implicitly know would quickly and easily get called out for revealing your bias about obviously subjective determinations of worth. Maybe basket weaving is really art or history or the study of native cultures. And there are plenty of smart people who have been 2.6 GPA students at some point, as GPA is not a measure of intelligence but an abstraction that simply measures one's ability to adhere to and excel at a fairly arbitrary framework.

Moral hazard may or may not be a simple, good solution but your argument for it, as presented, disincentivizes me from even considering it, since so much seemed to be missed in the argument, the same was probably true for consideration of the solution.