I feel I should point out that corrupt grading is easily detectable - one can often see it by looking at a corruptly graded paper,

Except who sees a paper except the grader and the student who wrote it?

Moreover, universities have a strong incentive to not be corrupt in their grading - if they let people slip through without learning the work, employers will start to notice and discount qualifications from that institution,

Empirically this incentive wasn't strong enough.