I spent 4 years gliding before I started my powered training (on my way to a fATPL) and yes I knew that we were allowed to fly in cloud, altho like you say the glider has to be equipped with certain instruments, the minimum being a turn and slip I think
ideally a AH obviously. The main problem of course then is powerinf them.
Personally I think flying glides in clouds isn't the best of ideas, and I don't think it should be encouraged, but I also don't think that it should be banned. It is sometimes necessary to fly in them, I have flown in cloud a number of times, usually when trying to jump wave bars and being caught out by the high rate of sink and plunging into the top of the next bar lol, altho I popped out within a minute into the lift
The thing that bothers me is that generally, (in my experience) is that if the weather is decent enough for decent gliding then it is pretty rare to have a good thermal to yourself and they will *usually* be other people about. If all these other gliders continue to climb into the clouds then you have a number of gliders flying close to each other in cloud. Now call me crazy but I think thats a pretty mad idea, even if they are talking to each other.