Here's why I think learning Rails would be good for undergrads: You get exposed to patterns like MVC and stuff like server vs client, requests, basic auth/security in a format that is practical and presents itself to fast iteration and quick feedback. I'd much rather learn MVC through Rails than the extremely dull and slow Java GUI apps we did in school.
I think the magicness of Rails is overrated for a beginner. A lot of people like to tinker with low level stuff, but in my experience in college most students wanted to build stuff. Having them build their own routing/template/controllers/etc or whatever would've been less interesting than just learning the high level concepts with Rails first.
As an added benefit, having some experience with Rails would've helped some students get internships.