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Re: "Wait, do I really understand this? Maybe I'd better spend a few days looking up related papers, or consult another textbook," they'd fail all the courses they took that quarter. A month later they would understand the material far better and remember it much longer - but one month after finals is too late; it counts for nothing in the lunatic university utility function.

This line of thought reminded me of Robert Frank's The Economic Naturalist: "When students are given tests designed to probe their knowledge of basic economics six months after taking the course, they do not perform significantly better than others who never took an introductory course. This is scandalous."

I gather the goal of Frank's student assignments is to have them think, even if imperfectly, rather than to parrot well.