I agree completely with your conclusions, OP.
I think the causes are complex. Most Overseas applicants use an IELTs result to satisfy their English qualification and IMO almost every degree programme in the land accepts too low an IELTS result. I do believe there is some fraud, but until standards become more meaningful it will be impossible to disentangle this mess.
No one is going to raise standards while we are running our universities on the dosh provided by Overseas students. It is an equal issue at UG level. Students have spoken with me about this, both native speakers and Overseas students who could not cope. The situation isn’t fair to anyone.
Adding ‘excellent communications skills’ to job descriptions is a great idea, @Sibilantseamstress
I know a young British-Chinese man fluent in Mandarin who turned down a great job in a tech firm where he interned. The reason is that he was placed in a group where Mandarin was the main language in use. Fine for him, but he spent much of his time translating for the two group members who did not speak it. Absent his presence, those employees had to attend group meetings in Mandarin where their manager would pause now and again to give a shaky summary for them. People weren’t actively exclusionary or rude, and they would speak English insofar as they could with these colleagues in personal conversations.
No one, but no one, wanted to know. This is a very productive group in a company we would all know. (In the higher levels of tech, ‘you should go to HR’ is not necessarily the best advice for one’s career. And it isn’t quite clear what the legal position is. Although I think the the whole thing is pretty bad)