Very few undergraduates I know take an active interest in research. At a school like MIT, Harvard or Caltech (throw in the schools take take extremely motivated kids) you can trust the undergraduate to take things seriously. Everywhere else, you are wasting your time and money if you expect the students to take an active interest in learning - kids don't want to take advantage of office hours currently.. to place them in control of finding, accumulating and critiquing their own literature is just wrong and contradicts everything known about human behavior
Also did the kids get a refund for the school's experiment? I would sue if a college wasted an entire year of a kid's undergraduate life just because of a hypothesis of a new / untested teaching style.