I have found that student motivation and performance increase when they know their projects will live on in the course after they leave it. In fact, students often voluntarily add to my class materials after they finish the course. Perhaps most importantly, assignments which encourage and facilitate collaboration help to prepare students for a world where teams are the dominant mode of conducting work in complex organizations. In a few minutes, anyone can learn to use an HTML editor and create Web pages. But some advanced features, such as online databases, require programming skills.
Students are good sources of cheap programmers.
The first cgi scripts for my course were developed by a student at my university who was happy to get some experience on a real-life project. It takes awhile to understand the power of a new medium. The Web is an immature medium which has not yet developed standardized navigation. Myst, for example, did not reach the top of the video game market just because of cool backgrounds. The navigational ambiguity actually sucks the player deeper into Myst.