I have to say, I think she has a point, given the notoriously poor judgement of undergraduates. They will sign up for that credit card (at a card table outside the student union) and go to town on it. Given most student housing is only a short distance from campus at most, a cheap beater will be as easy to ride the short distance and be less attractive to steal. And for the exercise part, I agree that electric bikes are perfectly fine exercise, but your average undergraduate will want to ride the thing like a motorcycle (until it stops working).
All that said, I think ebikes are superior for commuting to a job. Getting there not too sweaty, getting there fast, free parking, getting there cheap (after the initial investment), getting there on a bike even if you are not Lance Armstrong - all these are reasons (for me) to commute with an electric bike. Once those undergraduates graduate, get a job, maybe get married and have a kid or two, an electric bike commute might be the only exercise they get for a while.