A lot of the commenters here have brought up that you need handwriting in order to take notes, and that putting pen to paper has some meditative qualities that help flesh out ideas. I agree with both points, but neither one is a rational justification for requiring penmanship of students.

I still take notes with pen and paper quite regularly. I can read my own chickenscratch just fine, even if no one else can. Who cares? In fact, while in college, I developed a sort of hyper-condensed personal shorthand, to the point that my notes are basically a code that only I'm fluent in. That was key, because it let me spend more time listening to the lecture and less time drawing fonts. To paraphrase pg, "terseness is what written language is FOR" ;)

If anyone else has to read it, then you type it. Most of my teachers in high school and college required papers to be typed anyhow, and this is becoming much more common. It's only in elementary schools that we subject children to emotional abuse for their lack of calligraphy skills.

As for the meditative qualities of putting pen to paper, that's still not an argument for requiring penmanship. Most of my "fleshing out ideas" writing looks more like a flowchart anyhow, usually with plenty of the aforementioned chickenscratch shorthand all over it.

I don't wish I wrote less clearly. And I can write just fine if I do it slowly. It's just that my penmanship is almost entirely a purely personal activity, so as long as I can read it, there's no problem. We should teach kids to type fluently, think clearly, and draw script that they can read.