I set my students up on epals.com for email addresses specifically for signing up for Web 2.0 tools. For safety and spam, I'd rather have those accounts out there than my students' personal email accounts.
It also depends on what type of activity you want your students to participate in, because some of the host websites have features that are intended for use by students who don't have individual email addresses. For example, if you're thinking about having students use a wiki, pbworks allows you to create accounts for students who don't have email addresses. The site creates user names and unique passwords for your students that you just print and pass out.
My school technically does not have in-house emails, that is emails ending with our domain. However we are using a service called 'gaggle.net' which all of the students are using. It allows me to easily monitor my students' emails. I say 'easily' because we are a small school. Many of the students have their own outside email However, anything school based, such as homework and other assignments are always sent via gaggle. I teach in a 4-6 grade multi-aged classroom. (Montessori)
My district also uses Gaggle.net. This is my third year with it. I've found it useful, especially now that it allows parents to monitor their children's online interactions.
I use Gaggle to teach the different rules of writing (How is a blog different from a message board, chat, IM, text, and/or e-mail?) including grammar, spelling, etc. I bring in articles dealing with technology uses in the job market or in college so that students understand that there are different functions for technology. I teach online etiquette and keyboarding (no more spacebar, spacebar, spacebar instead of tab).
Gaggle is good about letting me know of possible violations. I receive e-mail when students use inappropriate language. Gaggle stays relatively current regarding ways to bypass the warning system, for instance, I received a warning about a student who sent a chat message with "FU." That student received a verbal warning. I've only had to remove one student from the system entirely.
My district has just begun using Moodle. It also has e-mail but I'm not using it very formally yet. I'm still learning Moodle myself!
My former district issues email address to all students grades 3-12. The restrictions are severe in the lower grades and ease to unrestricted by 9th grade. It is for school use only and students do have their accounts shut down if they abuse the privilege...most students rat each other out. I can't image not having email for students. Teachers emailed students work if they were out. Students used it to communicate for projects, etc. ...that said, my current district does not have student email and we are looking into it. We are exploring options with MSLive and Google. I feel that without student email accounts, especially at the HS level, it is a disservice to the students. How can we prepare them for "THE REAL WORLD" if we dont use the tools they will need. Etiquette and safety are so vital to teach them.
Actually, it's not clear that email IS the tool that today's students will be using! I've seen discussions in various forums pointing out that email use is in younger generations is being bypassed by other modes of communication such as texting or posting comments on facebook. That's not to say that certain segments of society like business or academia will drop email in the near future, nor that we shouldn't be teaching students to use it, it's just that we might find ourselves expending lots of energy to convince a school district to let us teach students email use when there are other battles on the horizon that will also need to be fought!"
My district uses gaggle accounts for all the students. That way teachers can ensure students have email accounts to due web 2.0 lessons and activities with their students. This is a district wide initiative and the technology department develops all the accounts then each buildings tech teachers managae and help students maintain them. The district has a great filtration system and emails are blocked that contain questionable content. Then we can easily consequence according to our student code of conduct any misuse of tecnology.