I wonder if this is a technique used by certain leaders of authoritarian regimes to take out people in power they they deem threats. Everyone in the party routinely breaks laws, knowingly or otherwise. The person in charge can decide they don't like someone and start an investigation, knowing they'll eventually find something illegal. Then they can delegitimize and remove them under the guise of "corruption".

Absolutely. It's often more calculated than that though. The only way (by design) to succeed in the regime is through corruption - you're giving the leader the rope to hang you with if you ever fall out of favor.

Very much so: “everyone does it” means that the leader can destroy anyone who doesn’t toe the line while seeming to be following a reasonable law.

Exactly. See also underposted speed limits, for example. It's not about being able to stop everybody, it's about being able to stop anybody.