I would think the biggest drawback for the class you describe would be that there is no easy way for the students to show off the games they have made. The export to web page option in Alice 2.0 is so buggy that it is essentially useless (I never have gotten a game to work at all that way) and the screen capture options (using another program) don't support game play.

The local art school uses Flash (Flash 8 a year ago, but they may have upgraded) which does allow you run your games on other machines - although the software itself is quite expensive.

Another free option would be Scratch (http://scratch.mit.edu/) which is pretty limited but does have an excellent web posting option. Despite it's limitations, I've seen some really nice games using that program - if your emphasis is on art instead of programming it should work fine.