There's nothing inherently impractical about functional programming. It's quite possible to write "real-world" code in a functional language just as easily as it is in a procedural one. Or rather, it's just as easy in a language that's mostly functional. Of course it's ridiculous to program in a completely functional way, just as it's ridiculous these days to program in a completely procedural way. There's lots of benefits to programming functionally, as long as you don't adhere to the paradigm beyond all reasonable logic.
But this brings up an important point regarding attempting to teach functional programming: There's no reason to use a language like scheme or haskell if all you want to do is teach a paradigm; you can program functionally in python or perl too. Maybe not to as great a degree, but much more than one might expect.
On the flip side of that coin, though, is the fact that so-called functional languages like lisp don't adhere you to a functional paradigm either. You can program procedurally in lisp if you want; actually, you can pretty much do anything you want in lisp. That's one of its perks. Moreover, there's plenty of real-world code written in common lisp, and enough libraries and support that it's just as easy to write actual code in lisp as it is in perl or any other language, for the most part. So as far as functional programming goes, if you're concerned about practicality then you're thinking about the issue in the wrong way.