I guess I'll have to break it down a bit more...
Using your scenario - That $50k you get. If you don't take that $$, you are maximizing the chance of your child having a successful career that he/she has worked extremely hard for. If you take it, you just reduced the chances - potentially meaningfully - because you know (or should know) that if it gets exposed, the kid will no longer be eligible.
In your scenario, you're potentially sacrificing one kid's career success for others.
Call me naive, but the whole argument of "everybody's doing it" justification is a joke. And the people fueling the system argument - there's nothing to fuel (in these circumstances, I'm separating from the funneling to agents/advisors situations) if you don't take the $.
Again, I point to the Cliff Alexander situation. His parents actions when he was at Kansas was arguably a huge detriment to his career. I know it wasn't illegal, but it arguably should be.