I see at least a couple of purposes for the request. First you can set up class lists of links to videos which students can then watch on their own schedule. Secondly students can use this account to search for videos when doing research for their own projects.
A student account is different from a teacher account in that students do not have access to the teacher tools section and the features associated with it. I am not sure if we have a potential issue with students downloading videos and eating up server space but I understand that if this does become an issue a quota can be set for this account and similar accounts in other schools.