I'm primarily a private lesson teacher in violin and viola, and I think that I would refer more of my students to IMSLP if it had a larger selection of student repertoire. IMSLP is fantastic if you know what piece or composer you're looking for, but I would send students here more often if they could browse by some rating of "difficulty level," similarly to how one can browse by composer, era, instrumentation, etc... I would love to give them a bit more control over what specific literature they were playing, given that they were looking over a limited list that I knew contained appropriate challenges and that they would not fall in love with a piece well above their current abilities.
I understand that this is complicated by a variety of factors, particularly various grading systems (i.e., the British grade levels, Suzuki book level, various American state grading levels, etc.). Also, many student-level compositions and arrangements are still under copyright. However, I could see IMSLP becoming a valuable forum for teachers to post their own arrangements of PD works, or even establish a semi-formal international difficulty rating system. With their limited budgets and access to photocopiers, schools and other educational systems often brush up against that which is permissible under copyright law, yet many educators have made arrangements of PD works for their own use that could be of great (and legal) use to their peers and their peers' students. I would challenge teachers using IMSLP to contribute their own arrangements and even their original compositions (understanding that sometimes you also hope to make money, fair enough).
Even better, I would love to see IMSLP develop a difficulty rating system, or even to include some sort of overview of the specific challenges and musical elements involved (e.g., fourth position, double stops, standard performance tempo, etc.)