I think it's a perfectly reasonable task. It rather depends on the experience and goals of the students, yes? Random HN commenters can't provide input on that.
A wiki would be another option.
What are you trying to teach them? I went through a coding school called Founders & Coders, one of our one week projects was to make a stack overflow clone. We really enjoyed it.
I think it would be cool to ask them to create a web app for a non-profit, which you could then open-source.