Julian,
I fail to see how failing to keep the needles centred 'maintains your situational awareness on the loc/GS'!
The ILS is designed to be flown with the aircraft on the glideslope and localiser. In the UK, for your IR you are required to fly with the needles centred, with an occasional excursion to a maximum of half-scale deflection being accepted. If you fly the whole ILS with the needles only just inside half scale deflection you will be failed for not attempting to correct back onto the GS or localiser. By the time you finish your IR course you are expected to have achieved a level of competence which will enable you to achieve this because you should be very current and have been doing a lot of instrument flying in a fairly short period. This should ensure that if in future you only achieve the minimum currency required to keep your rating valid, you should still be capable of safely flying an ILS approach for real should the need arise. It's like everything esle in aviation really.