It IS effectively discharged when it reaches 1.0v. The maximum safe full recharge for a NiCd cell is 1.44v. THAT is why NiCd cells have the nominal rating of 1.2v or 1.25v, a point halfway between fully charged and fully discharged. The studies were reported in the NASA Technical Journal. That certainly is a part of the old wives tale.
Trouble is, there is no scientific evidence of it.
The studies did determine that cell damage can be caused by repeated discharges without full recharges. As far as I am aware, the technology hasn't changed much. What we know has changed a lot. I, too, am an electronics student of the early 60's and learned the same things you did. Some fallacies were taught intentionallly simply because it got across the idea at a lesser cost.