Cheating is never OK. Look what that lead to. A few bad apples ruined it for the other students. People have to learn, that their behavior in such a setting does not only affect themselves. In this case it very negatively impacted everyone studying with them.
at some point it's like defensive driving. Sure, they are at fault and an idiot, but for the sake of your own safety you shouldn't "stick to your morals" or just "hope they get theirs". Look out for yourself, because for some people that's the only person that will do it.
With that lens, yes. I don't blame people who need to do what they do for one day in some artificial environment so they aren't impacted in their transition to real world work where they are otherwise moral.
Except, for many competitive positions, that's a zero-sum game.
In india, the engineering curriculum includes lot of subjects that are not useful for the students but only there because some fat belly officer thought it would be "Interdisciplinary".
Can you imagine teaching biology as a subject for engineers? waste of money and not what we have come to learn, or interested in. But colleges in India do that.
Cheating in such subjects is fair.