I think I'm old school in my thoughts. I think that one should be able to safely fly the aircraft without the automatics & whiz bang avionics *and* one should be able to operate all the equipment. Doesn't mean one would hand fly all the time - I use the capabilities of the autopilot/glass HSI/multiple Garmins/MFD/XM weather etc a lot to allow me to devote more of my resources to managing flight. It's not always about safety, either. Pax comfort, reducing flight times & increasing fuel efficiency et al are all considerations, but the ability must be there to complete a flight when the toys break. Anything can fail, leaving you with reduced or minimal equipment.
I believe training has to cover both options. Operating a flight with correct use of the a/p & gizmos is generally less difficult than having to hand fly for extended periods still be able to *think*. Still necessary to be taught how in both cases but the more difficult area is the one that will usually require more practice so training needs to be weighted that way. Also, it tends to be easier to move from basic equipment eg RBI/DI to RMI/HSI than the other way around so I favour teaching on the 'lesser' equipment. The lesser equipment forces a student to develop their ability to visualise what's happening or should be happening which acts as a backup to the whiz bang gear.