Illegal immigrants pay plenty of taxes as well. However, unless he would have given money to their endowment I don't think Harvard would have benefited from letting him graduate.

PS: Still I can't help but wonder what would have happened if he had showed up to that "disciplinary action".

Such as? I am honestly curious. (You will have to agree to exclude the entitlements of their children born in the US, who're are legal American citizens.)