There are two distinct classes of work that are called "busy work". The first is heinous, the second is often loathed, but great.
There's real busywork: work assigned just to take your time, create something to grade. That's crap, it should go away. (And in my collegiate experience, largely has.)
Then there's "impractical stuff": people often malign work they do that doesn't directly apply to the real world, but I think that it is often worthwhile. Consider MIT's famed 6.001: few of its students ever use Scheme, or any functional language, professionally, but the work in Scheme is never the less worthwhile. (Disclosure, I love functional languages.)
One thing I'm hoping is that if teachers use the service I described above, they'd be less inclined to create busy work - it would be obvious to the rest of their community that that's what they're creating, and so they'd have an incentive to not do that.
Unless they make all their content private and don't participate in the community, which is an option too.
There's real busywork: work assigned just to take your time, create something to grade. That's crap, it should go away. (And in my collegiate experience, largely has.)
Then there's "impractical stuff": people often malign work they do that doesn't directly apply to the real world, but I think that it is often worthwhile. Consider MIT's famed 6.001: few of its students ever use Scheme, or any functional language, professionally, but the work in Scheme is never the less worthwhile. (Disclosure, I love functional languages.)