Sharepoint Workspace allows instant messaging? Bye-bye Sharepoint Workspace unless the feature can be disabled.
Do block the technology, if that technology tempts the students into doing things that are not in their best interests or that cause you problems. Just as they can't use Skype or Messenger.
We block websites we don't want them to see - at least I do. Mostly because a sizable chunk of students cannot control themselves.
Something else to work around.
"If students are leaning against a wall and chatting you don't remove the wall." Because you can't remove the wall. You can remove Sharepoint.