I believe that a student working on the general public during their training is absolutely crucial. You need to be able to have experiences with strangers, which is how your career will be, and then go back to school and ask questions about it. It's also great because when a client sees you as a student they are much more likely to give honest feedback. Once you are doing massage as a career and considered a "professional," *most* clients generally won't tell you unless you really drill them.
It's not enough to just practice with fellow students in the class. You will develop a very close, comfortable relationship with most of them which makes the experience a different one -- at least when you're starting out.
I guess it's possible, esp. in california, not to have it, but I think most schools do have some sort of "practice on the public" thing, whether they call it an internship, or something else (student clinic, practice massages, etc)
The training program I went through had us do about 70 "outside massages" and I feel that was a very important part of helping me be confident when I started working in a spa.