I do understand what you're saying about human shortcomings and maybe your job is just a microcosm of society at large. It seems to me that there is a culture of saying one thing and doing another in your workplace, there is the way things are supposed to be done and then you're given the convinient way to cheat.
I highly doubt your wife would hold cheating on a test against you, especially when you were told that you could. What you did amounts to a DADT situation, not outright going behiend someone's back. Although I'm kind of wondering why she didn't chew you out for not turning everyone else in. If a situation is corrupt it's not going to ever change unless people start speaking up about it.
Do people make mistakes? Absolutely they do! It's pretty easy when your not the one "in the wrong" to blast others who have faultered. When someone is asking for advice around cheating or lying though I'm pretty sure that the general consensus is going to be not to do it. I don't know if part of the distinction between cheating on a test and cheating on people is that we are putting our lives in our partners' hands if we are fluid bonded with them and therefore need to have absolute trust in them. With a test it kind of sucks to cheat and get caught but you move on and it really doesn't affect anyone else.
I came to the realization a while ago that cheating any lying in my world always leads me to getting caught. Listen to that voice of your great grandfather, sounds like he's a wise man.
Everything will be ok in the end. If it's not ok it's not the end.