Hey!  I'm an academic!  It's also not the academics that make these rules,
it's the administrators.  In all fairness to the school, these procedures are
likely the result of trying to have a uniform thesis submission process
across disciplines that are substantially different.  I just think they need
to set up a system like many journals currently have.  If you don't submit
your document with the proper formatting and styles, the system rejects it.  
Once you do have the proper styles set, however, the system uses those styles
to perform the document layout that's appropriate for both traditonal paper
as well as the current online publishing formats.  The experience would be
more relevant to the stated goals of the thesis preparation and would likely
be a more efficient process.  I can see however, how this may be an even more
difficult task for someone in a department that may not have to go through
submissions like this on a regular basis.  It also introduces the problem of
defining some sort of standard document format that would likely result in a
mandate for the use of only certain programs/file types.  This is somewhat
problematic for a public institution (I'm in the US btw) as it requires some
reasonable justification for why all it's students MUST use/buy Word, for
example.  There are no easy solutions for this if it's to be implemented on a
university wide basis, which is why I think it makes more sense for the
departments to decide what is appropriate.

Greg