I was one of the few people that had the pleasure (or the displeasure) of being at the Library of Congress DMCA hearing room when the MPAA made this ridiculous argument. Suffice to say, I was completely shocked, flabbergasted, and just plain insulted that educators would truly be expected to do something like this in their bizarro world. Nevermind the fact that you would need an HDTV, HD Camcorder, Tripod, good lighting, and tons of time on your hands to manually create compilation clips with your camcorder (as if educators had any free time as it is).
I couldn't tell if the Copyright bigwigs that heard the argument were actually taking it seriously, but I sincerely hope that any appearance of sincerity was simply there for the sake of keeping respect for the hearings.
The one thing that I learned at the hearing was that you have to be fucking crazy in order to be a lawyer on their side. Even I (a soon to be unemployed law school graduate) didn't think that I could make this argument with a straight face even for tons of money.