I agree with you, Jeff, but with the caveat that the struggle has to have a realistic chance of success in order to drive the student forward. Good method books (and teachers) present the student with a gradually more demanding set of challenges, where each new piece adds a little, but not too much, to the student's previous experience. Teaching a student to play "Twinkle, Twinkle, Little Star" with the right hand, and then presenting them with the "Moonlight Sonata" isn't going to teach them anything, because it's a completely impossible hurdle to go straight from one to the other.
Teaching them TTLS and then playing the "Moonlight" for them and saying "Practice hard, and you'll be able to play this in a couple of years", on the other hand, will inspire the student to work hard.
Cheers,
Chris