Not quite true .. this is the only EVIDENCE you can present to prove your qualifications. Generally, these are assumed documents - Colleges may perform a background check to see if your name appears on the roles as a graduate - but should the burden of proof be required - the Diploma is your proof.
That said, I agree with you that SHE owns the Diploma - not the school. When she completed her last legally required day of class attendance, and having passed the required classes with anything above the minimum grade - she paid for, and earned the Diploma. As a juror, I would have no problem at all finding the School and administrators PERSONALLY responsible for Felony theft (definition: "In common usage, theft is the taking of another person's property without that person's permission or consent with the intent to deprive the rightful owner of it") - and I say "Felony" because in my view, spending 12 years working towards an education is well worth more than $1,000.
Perhaps if the Superintendant, Principle and other adminstrators were convicted of Felony theft, spent a year or so in jail and lost their credentials to teach - this abuse of power would stop.
I have never been asked for a copy of my diploma. Every time it has been my transcript and to have it sent directly from the school, not something I hand over.