> if you view higher education as gatekeeping for further life options

From the institution's perspective--or at least an "elite" institution like Princeton--that is what it is. When they confer a degree, they're conferring something valuable, even if its main value is as a status marker and ticket to future options. They can't afford to take the attitude of "let the cheaters cheat, they'll only hurt themselves", no matter how true it is, because it would destroy their brand.