I noticed a fellow named Gary Becker is speaking at FETC on copyright. Since he's been consulting with schools on the issue since 1975, I figured he must be one of the people responsible for schools and teachers being so misinformed on the issue.
It is not so much that this stuff is factually incorrect, but it is only one side of the story, and it is not the teacher's side. It is like having a union convention where corporate lawyers give all the presentations on labor law.
This FAQ, at least, indicates an extremely narrow interpretation of fair use. Also, the combination of instructional and non-instructional use cases is confusing, I think. The instructional uses are complicated enough and munging in non-instructional ones as well will only lead to a more conservative impression of the law.