So part of the problem with smaller groups of engineering students and projects is lack of resources form the school. From personal experience, the universities aren't always willing to provide ample locations for testing when the lowly undergrads just want to test their designs. Part of it is liability and safety standards (i.e. paying for someone certified or certifying someone to be responsible for oversight). The other part has to do with the stigma of undergrads and the fact they aren't the big "research" group that draws grant money in. Many students may be told "You need to test to get an A in this class!" but are also told 'We don't have a place designated for this activity, go figure it out on your own!".
So the students do what they feel is safest (not always the case, but you get my point). Most projects likely go fine and you never hear about them. When they go bad, NOW everyone wants to be involved and questions why they were so dumb and what were the policies, etc, etc. It isn't until the university may have lawsuits on hand, pie on the face, and newscasters at the doorstep, that they then take action; and usually it's to reform the programs, clamp down on student"testing", and water down the possibility of any meaningful experience because instead of putting the $10k up front for a facility, they now have the potential for a $1M lawsuit.
Not saying the group didn't do something stupid (as evidence by matches and potential poor material choices), but the bureaucracy involved with having "safe" facilities for student use has gotten out of hand. We had (and still have) a machine shop at my old middle school and high school and rarely had injuries more severe than a cut or scrape. How can a bunch of sixth graders have access to those tools, yet a college sits there and can't help a senior design student by providing a relatively controlled testing environment with some basic safety gear?