@Aethm,
That beats the typical bike trainer, although you probably don't get to use your own bike on that one. Lucky for me there is a velodrome just down the road from my apartment. Of course it can't simulate hills.
As for your argument that "not all kids are interested in sports", not all kids are interested in reading Shakespeare, do we let them read comic books instead (not knocking comics here, I love them). PE isn't just about getting exercise, its also about building team / interpersonal skills and learning to enjoy getting outdoors and being healthy. I doubt that teaching kids to play DDR instills the same kind of fundamentals. If we just wanted kids to get exercise we could just throw them on an elliptical for 30 minutes a day. That would be way more efficient that any sport. The hope is that by teaching the kids about sports they will hopefully take that knowledge of sports into their lives after school and not end up as fat couch potatoes.