At the schools I went to, I don't think a single plagiarism incident would get a student kicked out. They would fail the assignment or the class.
I'm not encouraging cheating here. But I learned that sometimes you have to accept that you hold to some rules just because morality, and you don't need to invent practical reasons to justify it to yourself and others. Sometimes following the rules leaves you worse off, but the world where people follow those rules is better for everyone than the world where they don't, and I want to live in the former.
Also the idea that "the system is underpinned by the notion nobody can cheat" is absurd. Cheating is rampant! Even in the ivy leagues. Especially in the ivy leagues! But people still value college degrees.
I'm not really a fan of no tolerance policies; I would rather the system be re-evaluated so that credentialing and training are the goals of the system, not pushing as many credit hours through the administration as possible. :)
So far in my short SW engineering career I haven't used a single thing I "learned" from my B.Sc degree, but what school did was to let me hang around with same minded people for few years which encouraged us to work on side projects together which taught us way more than any class.
That being said, I didn't cheat either, but I don't think cheating once is a good grounds for expelling someone.
Devaluing the degrees of everyone who didn't cheat, both economically and socially.