(1) We spend so much time drumming into students that they must cite their sources and, of course, avoid plagiarism, that some students will hear a mixed message if they are encouraged to use Wikipedia but not to cite it. Weaker students might well feel encouraged to take over material from Wikipedia without attribution and then to think that they are in some way doing the right thing by not citing it. If students have relied heavily on Wikipedia, then there is a problem, and it is one that is not solved by not citing it. David is not, of course, advising this, but I would want to be careful about giving students this advice lest the weaker ones misunderstood it.
(2) The ideal is to encourage students not to read Wikipedia but to write it. Whenever I am asked about Wikipedia in class, this is the response I give -- that they should be writing it as well as reading it. In other words, the students on our courses should get to the point where they know enough about the topic, and understand it clearly enough, that they see the need to correct errors, expand unclear information, add citations and generally improve the resource. I lead by example here and often make small corrections on articles I find on the site, especially when they relate to Doctor Who and especially when the grammar is bad. (Incorrect use of "however" is one of the greatest irritations).