I'm willing to concede that honorary degrees are a more or less inherently bullshit practice (recipients from my alma mater, Edinburgh University, in the year I graduated included Annie Lennox and the CEO of the Carnegie Corporation, which gives the university piles of money.) However, the point Karen's raising isn't just about this specific instance, and some of the other examples she brought up (James Franco at the Clocktower, for instance) can't be written off or justified as easily as a kind of necessary fundraising evil.
There's also more than one way to read the question of why we "lose our shit" over celebrity collaborations. Mostafa seems to be primarily addressing it in terms of critical response--the art-world cognoscenti who seem overeager to jump on every instance of celebrity/PR pandering, but we could also think of it in terms of why institutions lose their shit over celebrities (or as Karen put it, why they're willing to put integrity on the line in exchange for a moment of hype). In the case of something like the Franco exhibition at Clocktower, or Jay-Z's "Picasso Baby" at Pace, my sense is that the art world cared considerably more than "the public," so what's the point, from an institutional perspective? I guess part of my issue with these kind of collaborations is that they seem to underestimate the so-called "public," implicitly arguing that celebrity pandering is necessary in order to attract diverse audiences. But wouldn't a better way to attract diverse audiences be to, say, reduce admission fees? I see something deeply condescending in the idea that "the public" (read: the non-art-world, the ignorant masses, etc. etc.) needs celebrity nonsense as a point of entry into art, which often seems to be the subtext of these kinds of things. I don't see serious, adventurous, even scholarly, programming and a large, diverse, engaged audience as mutually exclusive prospects, but it means having a little more faith in the capacity of a non-specialist audience than these kinds of spectacular, attention-grabbing collaborations suggest.