Generally, campuses tend to highly segregate the research and dormitory networks (or at least that's the way it's done here). No matter how bad the dorm network gets, it can never infringe upon the research network's bandwidth. Now, the dormitory network might get so bogged down it's impossible for people to communicate across it, but that's an entirely different story. But any good netadmin should be able to segregate the two links.
My views on this are as follows: P2P and other filesharing applications should be given lowest priority. There are legitimate uses for these programs, but the probability of a given student using it for legitimate purposes is rather low, and so those that do use it for legal uses (i.e.: downloading a Linux/BSD ISO off BitTorrent) will just have to deal with slower traffic. There are plenty of ways to shape the traffic such that the kids who use the most traffic will still be able to do what they want (though maybe not as fast) while those who rarely use any can surf the web in peace. And just because someone uses a lot of traffic doesn't mean they're up to no good. I transfer gigs of data a day back and forth across the campus network (analyzing Snort logs, TCPDump captures, etc., for work).
I would draw the line at when a campus netadmin starts to block types of traffic - as students don't have a choice about what ISP they use when they live on campus, or whether or not to pay to upgrade to a better plan, or basically any other choice whatsoever about their network connection. As a result, that's fine if their filesharing (legal or not) goes slow - but don't block it altogether, unless they start drawing the attention of the RIAA/MPAA.
Now, as for a workplace (and I've been that netadmin before), by all means I'd block every last thing in/out except legitimate workplace traffic. If I ever caught an employee browsing porn, downloading warez, using a P2P network, I'd shut down their jack on the spot and call their supervisor.
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