The possibilities for using e-mail in teaching are more numerous than I can describe. Even so, I should also acknowledge that the medium has its flaws. About once a semester, all the essays stall in the pipeline because of a computer failure, uselessly arriving at their destinations after the class has met. Such technical problems can result in panicked phone calls, wasted effort, and botched class plans. If, as I once did, you circulate a sheet and ask students to record their userids from memory, the likely mistakes will result in your being bombarded by dozens of error messages a most unhappy fate, I assure you.
Some instructors prefer newsgroups to mailing lists.
Although I like the privacy and structure of the lists, newsgroups allow for more free-form discussion with minimal intervention by the instructor. In either case, our willingness to use e-mail surely takes pressure off the trees, though I must confess that I still assign formal papers in my classes.