While all those Soviet players were drawing each other, getting only 1/2 point per game, any of the other players who played well enough to win most of their games could have won the tournament comfortably.
The great strength of the "Soviet School of Chess" was state support of chess masters, giving them jobs in chess-related fields so they could be full-time chess players. The number of very strong players this system produced meant that the Soviet players were accustomed to facing stronger, better-prepared opponents than were their Western competitors.
Honestly, I think of this as a bit of a grey area. While there may not have technically been a rule broken, it clearly gave the Soviets an unfair advantage. The rules *should have* addressed this, but did not.
Where I think there is a failure is that the rules stayed for such a long time so that this practice was repeatable. It would be naive to simply believe that the Soviets did not have a hand in perpetuating the status quo. The status quo favored them; so they kept arguing for it.