The simplest expression of Gresham's Law is "bad money drives out the good." But the same principle applies in any other area where cheating is possible.
Thomas Gresham was an English financier who lived during the time of Elizabeth I. The archetypical bad money of his day were coins which had been "stripped", their edges clipped and the small strips of precious metal collected and sold for a profit. The serrated edges of many coins are intended to make this practice more difficult. Gresham observed that when there is bad money in circulation, anybody who finds themselves with good money is less willing to spend it, knowing that it will preserve its value better, while bad money is best spent while they can get away with it.
Cheating in sports follows the same pattern. By the 1990s, bicycle racers had all realized that blood doping, EPO and other cheats made it very difficult for non-cheaters to be competitive, and it's thought that there were very few non-cheaters in the pro peloton. 14 of the 15 winners of the Tour de France between 1996 and 2010 have admitted to doping, as well as many dozens of others in the field. The officials tried to regulate cheating out of the sport, but the cheaters got better at avoiding detection. Perhaps they're now strict enough--we shall see. The achievements of Lance Armstrong, Bjarne Rjis, Marco Pantani and the others are not really diminished by the fact that they were cheating: most of their competitors were too. For example, the 2nd place rider in all but one of Lance Armstrong's victories was also convicted of cheating at some point, and that one, Andreas Klöden, has been plausibly accused.
This is true in other sports too: Large chunks of the record book in baseball was rewritten in the 1990s and 2000s by steroid users. American Football, where the players seem to be regarded as more disposable than in most other sports, has been rife with steroid use since the 1950s at least, and there's been very little attempt to stop this.
But the most impact that cheaters have had on our society is in economics. Derivatives and banks were deregulated, coming to a head in the late 1990s. Within a few years, several effective scams to disguise fraud were invented: Derivatives were used as a way of distributing a small amount of high risk mortgages among a larger number of low risk ones, theoretically moderating the risk. These were extremely profitable. But with a little bit of fraud, it became possible to put more and more high risk mortgages in with the good ones and soon there was a bubble. There was a demand for mortgages to "securitize" and to the people making the short term profits, it didn't really matter if they were good or bad--bad ones were easier to get though. All the banks, even the government backed ones, felt they had to get in on this bubble or miss out. But after a few years, the bad mortgages started to make their presence felt. The panic that resulted crashed our economy. A few of the guilty have received handslaps: Angelo Mozillo was fined of about 12% of his take, much of which was paid by his company. Bernie Madoff, who was running a ponzi scheme that benefited from the climate of regulatory blindness but really wasn't a part of the problem, actually went to prison. A few of the perps lost their companies.
Most companies want to treat their employees fairly. Provide a decent pension, health insurance, a living wage, etc. But when a few companies find a way to undercut this, their competitors all feel the need to do the same, or lose in the market. An example is the airlines, which once had pretty good pensions and wages for pilots and other employees. In 2005, US Airways, and then United, declared bankruptcy and were allowed to default on their pension programs, turning them over the taxpayer funded Pension Benefit Guarantee Corporation, which would pay only a fraction of what was due to retirees. Many other airlines were soon forced to follow suit.
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