One of my students just sent me a link to this story about a professor who assigned her students to do a wikipedia entry instead of a class paper. Her motivations sound much the same as mine in incorporating blogging into my 375 class (class blog here), but I think blogging might be a better approach. The thought of thousands of college students being forced to edit or create entries is probably filling the hearts of the wikipedians with dread. I think a better approach might be to give students a choice between the two so that they don't feel forced to post to WP if they don't feel like they have something to contribute.
Yes, having them post to the Net (as opposed to handing in a paper to professor) will probably raise the level of engagement overall, but there are always some students who are chronically disengaged, and forcing them to contribute to site built on the backs of volunteer labor sounds very problematic to me.