W
I feel the same now as I did then. The very worst thing that these parents did was to tell their children, in effect, "you're not good enough on your own."
This - either the children feel even more entitled or deep down they realize they are a fraud and/or have benefited from fraud.
One other aspect - depending on your degree type, this cheapens the value of that degree for those who have them. Many times saying you graduated from one of these schools might increase your estimation in someone's eyes based on a perceived reputation of the difficulty of being accepted.
I give a brief story - I went to a state school and majored in engineering. I have a fellow HS graduate who went to MIT. I visited him last fall and we walked around MIT. I asked him the attrition rate of an MIT student - 10%. The attrition rate at my school from the engineering program was probably 75%+. Of course one could argue he was exposed to and possibly received many more opportunities that I in our respective educations and careers, however, interestingly, that was not the case and when I did interact with many of his alums, I was on par or exceeded many of them in my educational and experiential endeavors.
The point is - we all worked hard, however, in the long run, depending on your degree, what you accomplish and where you go many times depends on your desires and endeavors and not necessarily what name is on a piece of paper on your wall or in your files.
For those parents and students, the long-term effects of those decisions will linger not only for them but will reflect on others who will suffer from collateral damage.
I don't hold too much respect anymore from where someone graduates - too many variables determine that. I would look at their grades, references, experiences and watch their behavior. Integrity and honor mean more in the long run.