It's not just at Uni - it happens at schools
My girlfriend teaches English at secondary level. She gave out an assignment to her 4th years (whatever that is called now) which was the first of their GCSE assignments. When she started marking them she noticed that little Johnny had suddenly become a marvellous story teller having not been able to string 2 words together for the last 3 years. She handed me over his essay and I scanned for easily searchable phrases. Within 30 seconds I had his piece of work in front of me thanks to Google. Stupid little Johnny hadn't even bothered to change a single sentence - cut and paste.
Call me old fashioned but I think that may be called cheating. The internet is a wonderful tool - it allowed me to prove he cheated, it allows me to follow how Lancashire are doing while I'm at work, it even allows me to buy chocolate and ice cream from the comfort of my own home and have it delivered. What it isn't is a teaching resource. You have to have some knowledge before it can become such a tool. Undergrads are there learn the knowledge that will allow them to be able to use such resources. Kids will always take the shortest route to success. People are surprised when I say that most kids coming out of University aren't employable these days - the reason is they don't want to put in the work - they don't read around the subject and then don't want to put in the effort to catch up when they get into work. Like everything else in this society the shortest route to something is always considered best until it buggers up.
Of course if the students had any brains they'd use yahoo or alta vista now instead of goolge as there's no mention of them being banned. I wonder how many of them even know that those search engines exist - after all they will all be aware of the media resources out there won't they?