http://www.nsa.gov/ia/guidance/security_configuration_guides...
http://www.nsa.gov/ia/guidance/security_configuration_guides...
For the NSA and other top secret uses this makes good sense.
In the case of that high school spying incident, the BOFH responsible had handwaved away the random LED flashes as a bug.
If the school wanted to disable it though, it wouldn't be impossible for them since they had access to the hardware. A thin dot of black paint might do the trick, especially if they peeled back the glass a bit, which is a pain, but quite do-able. Certainly something people in the NSA would be wary of... it's a shame that high school students should have to worry about that, too.
On Macs it has the added bonus of still letting you see when the camera light comes on.
http://www.nsa.gov/ia/_files/switches/switch-guide-version1_...