"Does Microsoft really think so low of us students that we'd pass the discs around even though it's only £60?"
Yes, and they are correct as far as I can tell. I work at a university and hear the students talk about copying each others software all the time. All you have to do is sit on the computer side of the university bookstore for 5 minutes and you can hear at least
one student say 'I pay half and you can burn me a copy.' And they are not talking about music, they are talking about MS Office or Photo Shop. Both of which they already get for aroun 15% of the retail price (~ $60 USD).