I think it's a no-brainer.
The idea is to teach VFR DR nav. From a map.
Putting myself back in the position of a student, I'd have no faith in the instructor who wasn't using the same method of nav that he/she was asking me to use. Simple as that. Like an instructor who can't demonstrate accurate steep turns but expects me to do them.
Have the GPS with you - no problem - but used in the way Beagle was suggesting.