Thumb drives are a major security issue for many government offices and government contractors. In addition to being very easy to use as a means of spreading a virus from machine to machine, in theory, it would be very easy to install data mining software on the board in the USB port. I know I couldn't use USB ports in many places at GE or IBM when I did consulting work for them.
If you open up that email to help that poor Nigerian Prince get his money freed up, in addition to trying to get you to write a check, the buggers will try and put a virus on your usb drive and or hard drive that will allow them to see your security passwords, etc. Then if someone else uses your usb drive, they have another computer to mine. Very nasty and sadly, not that hard to do.
A little paranoid? Probably but it happens every day. Students tend to be a little more footloose and fancy free when it comes to drive sharing than many. As such, it didn't surprise me too much when everything got shut down last year. On a brighter note, they open up the ports when they are at sea and then close them down again when they get back to campus. That seems a reasonable compromise.
On campus, they can use network storage. I doubt they can use dropbox or other cloud applications but if they can, that is a great approach.
Forgive the length on this. I just started teaching at a state college having taught at a private university and the security at the state school is far greater. I feel our DS and DD's pain with IT regulations. In fact, I live it!