IME the reality is that trust erodes as cheating becomes widespread. The consequences of less trust are significantly higher costs and more stress and fear.
FWIW, I don't advocate blind trust.
Perhaps you meant to say we should teach the reality that cheating exists and is bad; not to pretend it doesn't exist? Or that it's hopeless to be honest and trustworthy because some others may not be? Which leads to ... apathy or more cheating and less trust.
I never said cheating is moral. I said cheating is advantageous. You think cheaters care that they're hurting society? You can't be a cheater without being selfish.