Students need to learn VFR navigation in order to pass their skills test.
I'm surprised no-one has picked up on this one.
If that's what you believe, then instructors can use GPS as much as they like, and (as you say mumbo) the instructor can really focus on the delivery of the lesson. As soon as the candidate passes the LST, he/she will buy a GPS, and the argument becomes a red herring.
On the other hand, many instructors believe this:
Students need to learn VFR navigation because it will keep them safe for the rest of their VFR careers.
If that's what you believe, then Beagle & co have it right. The student doesn't need a GPS in the same way that the maths teacher doesn't need a calculator to keep track of the long division problem that is half completed.
Liking the thread - hope this adds something useful...
O8