Of course it's a bloody normal aviation procedure!
As long as we fly single engined aeroplanes, we run the risk of an EFATO or a failure at altitude. If the CAA rule that we have to demo it for licence issue then obviously they realise it could happen in the course of a "normal" flight (not simulated under test conditions) and as such we have to deal with and train students for it accordingly. That in my book means being realistic. The chances are if the engine quits on take off, it'll be <500' when it lets go.
But hey I know......... We'll teach pointless and unrealistic demo EFATOs at higher levels and protect our licences, just to keep the CAA legal beagles happy (only dogs I'd like to see taken to the vets)