Yeah, I think the issue you'll run into is doing anything related to docs, etc. We are deploying a set for two 5th grade classes and I would not even want to deal with one account for almost 50 students...personal preference.
Out of curiosity, why not create accounts for them? The purpose of GAFE is sharing, collaboration, engagement, just to name a few items.
Maybe my question should be, why does the teacher not want to do it?
Sean
I think your biggest problem will be in using documents. Naming is going to be incredibly confusing. As kids will want to use the same name for everything. I would suggest creating accounts for your students. We have individual accounts for 1st graders, and after the first couple times logging in there never seems to be a problem.