I'm not so sure I'd agree that failing the course is really appropriate. These people are paying to learn and the teacher provided wrong answers to students who may have legitimately been looking to study. Of course, 2/3 of the students admit it, so it's moot in those cases; at least some of those who claim innocence may have a reasonable claim.
To oversimplify, it's hard to defend a CS exam where a student selects (D) here and their excuse was that a flash card told them to do it:
How would you import a module in javascript?
A) import * from 'foo'
B) from 'foo' import *
C) import { * } from 'foo'
D) for i in `seq 1 10`; do echo "$i"; done
Note, there are a tonne of questions upstream from this like the validity of requiring these students to be taking this class, and requiring them to take this exam, and this format of testing students, etc. But keeping the question of whether the student's outcome was reasonably impacted by the decision to replace the answer sheet with a fake answer sheet on Quizlet, I have a hard time believing it did.
> whether the student's outcome was reasonably impacted
Here's where I have a hard time. It's very easy for the outcome to change from a failed test to a failed academic career. The method by which the professor determined who was cheating is dubious enough that it may have caught non-cheaters (from an ethical perspective; assume that the person who found the test on the website is genuinely intending to study the material which they believe is correct). I guess it's moot from the university's perspective if it's against their cheating policy. But on this ethics topic, I'd have to argue for the professor to have more doubts about their decision.
Sam has been having trouble understanding their evolutionary biology coursework all semester. It's coming close to the final and they are frantic to find any help they can get. Finally, they encounter the Answers in Genesis website and use it to make a set of flash cards. They drill those flash cards relentlessly in their best effor to learn the material. Come the final, Sam answers every question with "God did it and evolution is a lie".
I will agree with you that Sam has not behaved unethically and has not cheated on the exam, just as you believe that some students did not cheat on the ethics exam. That said, I do not believe that Sam should pass the final, as they have no understanding of the material. Even though Sam has put hard effort into studying, they have studied the wrong material and put zero effort into vetting their sources, so they deserve to fail the course.
Do you believe that Sam deserves to pass the course or am I missing an important difference between my hypothetical and the actual events?
That being said, there does seem to be a certain assumption about the intentions of any student who would use this service. It’s not hard for me to imagine someone who has to and wants to bust their ass learning getting caught up in unfortunate circumstances (like the stress of wanting to pass a final causing the poor decision to use this study resource coinciding with their teacher poisoning said resource coinciding with the aforementioned stress causing them not to question the incorrect information they found ultimately resulting in their expulsion for otherwise not-necessarily-unethical behavior) because it’s assumed the professor was adequately tricky with their questions.
(Maybe I just need an hour off work to explain myself properly on a Friday.)
I don't think it's possible anyone legitimately studied using easily determined false information. If they did, failing the course seems appropriate anyway.