While you can argue patents are only paper, a valuable patent is worth defending. In this case, she was able to demonstrate prior art, meaning that a patent could not be granted since they have no idea to protect since it's been in the public domain (i.e. released to the world) and not an original/non-trivial idea. This is why academic publication, or in the past the use of laboratory journals, are useful in documenting time of the invention.
MIT is free standing when it comes to their finances. They have a $16.4 billion endowment. So Google (etc) doesn't have economic leverage over them, such that MIT always needs money and can't afford to ever cross large organizations.
If you get three or four of the better schools together in the conflict, Google would beg forgiveness. They desperately need access to the best those schools have to offer, and they know it. That access and relationship is worth more than gold or pride to them. Money? They've got so much they have no idea what to do with it. Get cut out of critical relationships with elite schools and that can take enough of your edge away over time that you start losing in subsequent competitive rounds of don't be killed by tech inflection.
I'm from a scientific background. Plaigarism is the most serious allegation you can level against someone. This is a whole 'nother level.
Sure, there are plenty of people who would refrain from stealing anyway just because it’s morally wrong. But there are enough people who don’t care that the whole idea of property rights becomes meaningless in practice without some way of enforcing them.
Aside from morals, the threat of reciprocation, not by the state specifically but by the property owner who was harmed and anyone authorized to act on their behalf.
Unlike actual property, IP isn't based on reciprocation. The penalties for infringement go way beyond simply losing similar forms of IP.