That's a helluva lot of money to spend in the middle of a budget crisis on paying people to do work, the nature of which is so far undecided.
Justifying one enormous waste of money by saying "Oh well, at least it's not as big a waste of money as that other waste of money" isn't a good way to run a budget.
Would you run your personal budget that way? "Aw geez, well I bought a $300,000 boat last month, so I guess it's okay to buy a $100,000 car now."
I agree, though, that big spending plans are things we should be very skeptical of. To be honest, I know some people who do run their personal budget like that.
For my bar mitzvah, I spent a similar amount of time fixing up an old, old path in the woods. It used to be a hiking spot, but it fell into neglect. I walked along it, a group of girl scouts painted trail markers, and over the course of a year we had something new in a boring town.
College is a big problem. I'm in a public school, and tuition is rising rapidly. Something has to be done to fix things. And I like this plan a lot: it means that in exchange for $4,000 students are really expected to do a lot. A hundred hours of service means that a lot can be done. I doubt 10 million students would really take this offer - there are a lot of rich, lazy kids, and a lot of kids with scholarships - but if, hypothetically, 10 million kids each spent 100 hours doing community service, we'd have a billion hours a year being spent trying to fix up things around the country. That's a pretty incredible force.
And Obama hasn't delegated that money yet. He's proposed it, because he thinks it'll work. If you have another plan, one that you think will work better, there's a webform you can fill out to send your ideas. Who knows, it might be worth a shot.