Morals and principles might seem like an odd thing to discuss in a prison environment. But if you've seen the Shawshank Redemption, you get the gist here. There's good and bad (and principled and unprincipled) people in prison, like in any other place. In fact, the gulag of One Day in the Life of Ivan Denisovich has mostly decent people in it who were arrested for unjust reasons. These people were decent before the gulag, at any rate. Life in the camp definitely changes people, and surviving the gulag system requires some moral compromises.
But characters like Shukhov have certain lines they won't cross. Shukhov refuses to become a "scrounger," or someone without honor or moral qualms. Shukhov does some shady stuff and isn't afraid to work the system to his own advantage, but he'll only go so far. In the outside world, the pious Alyoshka would probably be the only person in Gang 104 with "principles," but in the camp someone like Shukhov qualifies as principled, especially when compared to some of the more ruthless and violent prisoners.
Shukhov shows that holding onto some principles is vital to survival, since principles help a person maintain dignity in a dehumanizing place.
The camp system is deliberately set up in a way that tries to destroy people's morals and values.