To the grandparent: having grown up in Claremont, I can tell you that the reason Harvey Mudd has less problems with alcohol than the other Claremont colleges is almost completely a result of which students it accepts rather than its honor code.
What you say certainly has some truth to it, and I am skeptical this policy would work for the population at large. However, the other colleges (especially Pomona) are also pretty selective in their admissions, and there is a significant overlap in student life between the various colleges. While Mudd's honor code may not work as well with other student populations, I also think that other regulatory systems would not work as well with that student population. For one thing, it's essentially a college of hackers (in the HN sense), so having a stricter or more explicit set of rules would probably result in "creative" ways of following the letter of the law, with less regards to the spirit.
I did however, grow up in an affluent neighborhood, and I seem to recall that some people there neither angels nor saints. Maybe about as many as in my current locale.