A) Uses the libraries or techniques the students need to learn about
B) Hasn't already been done or requires meaningful improvement
C) Doesn't need to be done with stiff reliability or time constraints
D) Doesn't involve an excessive proportion of uneducational grunt-work
is an incredibly difficult challenge, and solutions simply won't scale. Besides, there is moral hazard involved: you don't want the system to devolve into a free labor source, yet the incentives for those in charge are aligned to encourage development in that direction. You go to school to learn techniques that are difficult to learn on the job and that you are unlikely to learn on the job, goals which are subverted by having students work in what begins to look more and more like an unpaid (or negatively paid) intership.
For the smaller project courses, I just want to see the option of getting marks for contributing to a fun/useful real project. The rest of the list could stay the same if the professor chooses. There would never be a lack of projects.
Our capstone project is already an unpaid project. The industry sponsors just pay for the materials you need. You do work for the company for marks, and you hand over all rights to your work. Nobody has a problem with it. It's practical experience, and it's a requirement for your degree.
I'd love to see more schools embrace informal interdisciplinary collaborative opportunities to build projects that aren't disposable but have a real purpose. I've been working with my local startup community to integrate further with my university to provide practical projects for courses, mentorship for those who need it, integration with the local industry, and speakers to inspire them. I think it will provide students with more engagement in the learning process, and teachers with the opportunity to discuss the issues that they're very much interested in.
Learning by doing, but having a purpose for doing. Maybe there would be investor interest when they're finished, but regardless the goal would be to build something that people are actually going to use. Using and teaching the latest technologies, and relating it to the curriculum which is often based on fundamental concepts.