> These students did absolutely nothing wrong.
> The paper would get rejected, or heavily revised, and the world would keep spinning.
Which means they did something wrong. Sure it might have been just a mistake, not quite the cardinal sin the GP makes it out to be, but you don't have to publish papers with flawed arguments on ArXiv.
It's one thing to write up a silly LaTeX PDF with wild speculations, put it on your webpage, but you don't need to submit every brainfart to ArXiv either, or do you?