Completely agreed - plaigiarism is rampant because collaboration is so natural and doing work for its own sake does nothing to advance one's understanding of the material.

All subjects, to the greatest extent possible, should be heavily based on collaborative projects that give back to society. Demonstrate your knowledge by contributing original research and ideas to Wikipedia. Contribute to an open source project on github using algorithms and methods you've learned in the classroom.

Society should benefit from the education system, not just through run-of-the-mill degree programs, but from the fruits of the labors of its students.

There is so much untapped potential.

Seriously, just imagine if a fraction of the students taking the massively popular ML class on Coursera had created a project on Github.