How? I can vaguely see it if the assignments were truly out of step with the material, but I cannot understand how relevant assignments are a distraction. In mathematics, and in all CS courses I have taught, assignments are at the core of what you are learning, and the best feedback (to yourself and your teacher) that you have a working knowledge of the material.
The other dichotomy is also strange, especially since the only person with an actual job is the professor - it is in fact his direct responsibility to structure the course, including incentives, to achieve the best learning.
I don't understand your second question. Currently, university assignments are graded to hold students by the hand. I'm saying they shouldn't do that.
The thread was abou that, but your argument wasn't, it suggested an alternative reason for rejecting assignments, so would be true regardless of cheating, thus not related to this thread
But I guess I let through that yes, I don't think we should take students by the hand at all and you're right that's a whole different debate.