If the only tangible, marketable value of graduating from a prestigious school was the raw knowledge and skill, I would agree with you. But it’s not.
Having worked with people who clearly got preferential treatment in hiring based on their school’s prestige, over more capable applicants from lower-tier schools, I absolutely lose respect for staff at universities who turn a blind eye to cheating.
This is quite plainly not the case. If curve grading is used, cheating directly harms other students who aren't cheating. If curve grading isn't used, the university may end up handing out high grades like candy, and that's a problem for the university.
Higher grades can translate to better career outcomes even if undeserved. If it were clear that this wasn't the case, nobody would cheat in the first place.