I see this as a brilliant move to foster the kind of curiosity which IMHO is essential to be a good engineer; as an added bonus, it teaches them from an early age that systems can be defeated. That goes a long way towards curing the blind faith in the security of, say, one’s cloud storage...
Similarly, you can't build a secure system if you don't know how you'd crack a secure system.
Of course, you don't have to really know exactly which tools to use but you'd still have to know the common methods of attack, how they work, what type of tools people might use.
Once you know that, you can take steps to defeat the tools and workarounds.
As a topic it sounds cool, but it is not actually that interesting, not what attracted me and you won't be able to use those skills that much in real life or real situation. Not that practicality is standard, I like plenty of impractical things (like theory).
I mean, doing basic pen testing is repetitive mind numbing work that requires mostly rote learning. It gets interesting and challenging only later on. Fake hacking exercises can be fun, but that is not basic pen testing - that is game.
The point isn’t to learn how to pick a lock. It’s about learning how things work.
Through, here it is likely to be framed more as game and not real thing. When they shoot water pistols, they are not learning to kill either.
One of those doesn't belong on this list. Lack of respect for boundaries in this context is really a lack of respect for authorities, and that is an extremely important thing for a society to have, and has absolutely zero intrinsic connection to willingness to cheat or to harm others, very much to the contrary: Only if you are willing to challenge authorities will you successfully counter authorities harming others.
You can learn how to subvert systems and at the same time how to use that skill to the benefit of society, be it by building systems that aren't so easily subverted where that is appropriate, or by defending people who unjustly are accused of things they didn't do due to unjustified trust in the reliability of an unreliable system.
None of that has anything to do with kids toy hack exercises. Which are exactly that and are fine as long as they are fun.