I agree with you but I have found that there is one rule for the publisher and another for the Elders and there friends.
Yes, there plenty of people that never reported anything and others who would report minor, embarrasing infractions. As you say, the elders would sometimes ignore the behavior of their children, because they didn't want to "lose their privileges", etc.
Any organization that requires its members to spy on one another and report each other is destructive, IMHO. This is not normal, adult behavior, it's one hallmark of a high-control group.