I'm not sure anyone advocating for reduced standards is any more prejudicial or threatening than you are in asking for higher ones. Regardless of the causes, minority and poor populations received a lower quality education before the pandemic and then suffered dramatically more during it. But nothing at all about the bureaucracy of the education system has changed, and so those measurements - by and large standardized exams - used to determine achievement are perhaps even more powerful than they were before.
And what I think many within the system feel is that the cost of failure while still a student is far greater than the cheat of leaving it with paper promising a value the young person doesn't have, nor will have if held back. We really have little to nothing in place in our current system to help the kid who is still failing classes at 12th grade, yet the stain of failure can be nearly impossible to remove.
Moreover, the 'academic' functional literacy and number sense demanded of a graduating high school student is not the same as illiteracy. Many many students who fail at school are in no way failures, yet that mark, that stigma and shame closes far more doors than even an inaccurate diploma allows.
Which is the problem nobody is willing to address. Students who are held back because they fail some portion rarely overcome the failure. (I suspect this is in part because it's designed to motivate the potential failures as much as discover the already failed.) And in all honesty, any student who lacks functional literacy and number sense (enough to read their phone and add the cost of things) by middle school needs a very different environment than the one presented by our institutional high schools.
The sin of good intentions runs both ways, I think. Those advocating for higher standards must ignore that the Institution is ill-equipped to actually follow though on an extremely complicated, even impossible, demand. Those advocating for reduced standards must accept the broken promises of their field.