Hi Jesse,
The reason we're removing families is that family support is far more than just a database file - there can be hundreds of thousands of new lines of code written for most new families, because they often contain at least some features that were entirely new. For example, Cyclone II was the first family without a 6-LUT that supported independent placement of LUTs and FFs during detailed placement. In general, there can be far more variability between different FPGA fabrics than there are between different processor architectures, which means that *all* aspects of the compiler (including supporting tools like timing analysis) can be affected, not just a backend machine instruction generator (as you might find in GCC or LLVM).
However, over time the focus of development shifts to the newer families, which can have very little in common with older families despite a common name (Cyclone V looks very little like a Cyclone II). At this point, all that code must still be maintained and tested, but are not being improved. On the contrary - sometimes an algorithm will be rewritten in a way that helps the newer families but hurts the older ones. Or perhaps a piece of infrastructure is rewritten to handle massive new memory requirements, but back-porting that piece of infrastructure to an old family would have a negligible impact on memory yet cost a lot of time and probably generate a lot of bugs.
Even without backporting, features are constantly upgraded with the new infrastructure in mind. Unfortunately, developers (who are only human) might not fully understand the older version and break features that used to work. And because our tests coverage isn't perfect and many of our customers don't use the old families anymore, these bugs can escape testing and make it into the wild. So the claim that your students are making - that the latest version is always the best - is not always true.
In summary, maintaining old families indefinitely results in minimal improvements to those old families and the possibility of new bugs that increases over time. At some point, therefore, it makes sense to drop support for older families. This is just like any software package dropping support for older hardware and OS (the latest Photoshop requires Windows 7, which was only released in 2009).
Other notes: 13.1 is not a "minor" release, it's simply the second release in 2013. We generally release twice a year; the first one is called [20]xx.0 and the second is [20]yy.1. I can't comment on the RTL viewer but if you file a mysupport with screenshots of the old and the new, perhaps the relevant team could make some improvements. And while no Altera software supports Windows 8 (yet), I'd be surprised if you had trouble running 13.0 on W8 since most OSes are pretty good about backwards compatibility. File a bug through mySupport if you run into trouble with that; I'll also check to see if we have any formal plans to validate 13.0 on Win8 and other newer OSes.