I and a lot of people I know are/were working (not as interns) alongside school and many internships at the university are payed.
The pay might not be as high as what you'd get after you graduate but it's definitively better than most working class jobs that do not require any formal education.
The grandfather-post's observation applies more to liberal arts students (Geistes- und Sozialwissenschaften). With a math degree in Germany I never had a problem getting a paid internship during my studies. Some of my friends in the liberal arts, however, have to do unpaid interships even after finishing their studies.
Of course the media perception is dominated by liberal arts guys, because they are the ones who complain loudly and in a matter sympathetic to journalists. (While the more technical minded people are too busy making money and enjoying themselves.) Hence the "Generation Praktikum".
[1] my sister is in that boat right now - she can find paid unskilled work or unpaid design work; she's in Berlin, though