I am troubled by this argument because it suggests people have no ethical core. If that is true then we are going to have problems with them regardless.
But we are really great about rationalizing away ethical issues. I suspect is a good grade is worth more than a personal sense of ethics.
As much as a med school wants ethical students, they want students with 4.0s more.
Cheating in school is just an easier or more assured way to get a better result. When you find a way to do things better in non-academic settings, you get rewarded.
Things that are truly unfair are regulated and tested for with steep penalties.
I think most people would admit the academy is a bizarre place with rules that don't really apply in other contexts. In school it matters that _you_ came up with a solution. In most other contexts, it just matters that you have a solution.
I agree with the first part, but I think the second follows from it.
Take a class like organic chemistry. When I was in school, the grade was based on 5 exams, each worth 20% of your grade. Worse still, anything less than an A was seen as a failure for most students dreaming of medical/vet school.
Of course you are going to have people that are going to cheat. You've made the stakes so high that the consequences of getting caught cheating are meaningless.
On top of that, once enough students are cheating, you need to cheat just to keep up.