We totally have this going on at our house, too!
All my kids like to save recyclables, but my DS11 is the most into it -- he always wants to make something out of something else. He has always brought things home from school that his teachers were getting rid of. I, too, was horrified, but got the same teacher resonse that you got, cricket3! Some of his favorites: a silverware basket from a diswasher, a letter "F" encyclopedia, and an entire set of office chairs that were going to be thrown out! For his 9th birthday we literally just got him 50+ boxes of all different sizes along with different types of duct-tape and miscellaneous do-dads from the hardware store. They kept him/them busy for many many months, and they eventually made a really great castle out of them a la "Henry and Mudge and The Long Weekend."
Now we institute a rule that for every new item that comes in one has to go out, or we wouldn't be able to walk through the house.
Ditto on Camp Invention, too. A huge favorite in our family.