As a Harvard '04-'05 grad (two numbers meaning I left early) I think The Crimson, as per usual, misses the mark.
It is indeed partly the part of the faculty for not engaging with students (e.g. teaching) enough. But even if some of the faculty had engaged more with us as students when I was there, I might have run for my life even faster than I already did, because some of the faculty just weren't that great. In fact, some were awful. (I've written a not-very-popular book in which this is a major theme.)
Harry Lewis's attempt to protect the students from blame here is admirable, but similarly mistaken. Harvard's admissions office (which used to be run by his wife, I'm not sure if it still is) selects for the best and the brightest, but inevitable in such a selection process is a tendency to pick what William Deresiewicz calls "excellent sheep"--kids who do (or appear to do) what they're told extremely well. When you pair that with an Office of Career Services (OCS) that acts as a funnel to Wall Street--many people in my class ended up destroying the world at Lehman Brothers, Bear Stearns and Goldman Sachs--what do you expect to happen? You've got a huge population of smart kids whose end goal is a place in a culture where success at any cost is not just appropriate, it's encouraged.
A large portion of football team cheated on a midterm in Economics 1010a in 2003 (they took advantage of a scheduling conflict with Statistics 104 to get extra time on the exam), but no one ever got in trouble for it. My guess is that half of the people who knew about it wished that they had been so "smart."
The cheating scandal is major, but in a way, I think it's the least of Harvard's problems. They haven't even touched on the Adderall problem, or the kinds of faculty conflicts of interest highlighted in Inside Job, and they've only slightly addressed the draconian, opaque and backwards nature of the Ad Board. Even knowing about some of the important research that goes on there, in my opinion, Harvard's real problem is that its general role of late has been pretty far from a force for good, let alone truth. It's just been a rubber stamp for the broken society we read about in the headlines daily. Correcting that problem requires actual leadership which, since Larry Summers was President, has been sorely lacking.
P.S. If you think the Valley or even YC is disconnected from this dynamic, don't kid yourself. CS50 enrollment is way up because everyone thinks that they'll be the next billionaire like Mark. But CS50 is not why Bill Gates, Mark, Sheryl Sandberg (Summers's former assistant) or Nathan Blecharczyk sit atop billion-dollar companies (see http://www.aarongreenspan.com/writing/essay.html?id=70). And with Jim Breyer of Accel now elected to the Harvard Corporation... You get the picture. Cheating has its rewards.