But I am saying a graduate from a CS should know how to use it, just like they should know how to use a pencil.
No, they shouldnt. Was agreeing with all else until I came across that statement. Point is, CS degrees are absolutely complete without knowledge of how to use Linux. CS degrees cover the foundations of computer science. And knowing how to use Linux brings zero validity to the degrees. Foundational concepts do. That empower them to build or improve on systems like Linux. Like operating systems concepts.