Amazingly, a lot of people don't know what plagiarism is. The think "write an essay" means the same thing as "copy from an encyclopedia". From TFA: "He said one student wrote him soon after he posted his letter and confessed to submitting a plagiarized essay, but the student said he had not realized that copying and pasting from other sources was wrong."
I think the problem lies in elementary school. Students are encouraged to copy texts (in order to learn writing) and they are simply never told that actual essays are supposed to be something that they invent themselves.
I suspect most of the students who genuinely did not realize they were plagiarizing were actually from developing nations with little in the way of formal schooling. I've met plenty of people who manage to morally justify or rationalize plagiarism in their own mind, but I've never met an American student in high school or college, no matter how academically shitty they may be, who ACTUALLY believed cutting and pasting essays was acceptable to their respective academic institution. They may have though it was justified, or "not a big deal," but they always made some kind of deliberate effort to avoid being caught. Any of these kids who gets caught and says "I didn't know it was wrong" is full of shit, and just trying to avoid the consequences.
A student from an entirely different culture in a developing nation, on the other hand, who may not have ever had to write an original essay at any point before being exposed to free online courses, may very well be completely unaware that they are committing an act of academic dishonesty.