All honorary degrees diminish those who have worked to earn legitimate degrees.
No, they don't. Because, as stated, pretty much everybody but you understands that they are different beasts.
But, even if they weren't. A young girl was ripped from herself untimely. Any "diminishment" that her fellow sixth graders will experience via having to share their sixth grade diploma with someone who has passed is diddly-squat compared to what the girl lost. So, really, a sense of perspective is in order.
And how, exactly, does this help people "heal"?
If you honestly do not understand the basic interactions of human mourning, you probably need more assistance on the matter than can be given in a short-form, plain-text medium. If you really want to know, I recommend speaking to a mental health professional or grief counselor about it. They'd likely do a better job of describing it than we can.
But, we can try, I suppose. There are a few ways such a memorial might help:
1) Generalized emotional support. As I said upthread, when someone is grieving, or under great stress, the plain statement that others in the community care is assistance. Humans are tribal animals, and we can draw emotional strength from support given by others.
2) There is a certain amount of mental processing that must occur for humans to get past a major emotional loss in a healthy manner. Memorials of this form can often assist that processing, by giving it a framework, and marking at least one of the milestones that was expected, but was aborted.
3) You noted in the OP that this was the result of a drive-by shooting. That means it wasn't just a random accident, but a community-centered one. There is crime within the community that caused this. Failing to come together over it may well allow fear and cynicism to bake that much further into the community, which can be part of a negative-feedback spiral.