I couldn't disagree more. A team should never be asked or expected to play to anything other then their potential. In a blowout, I really believe it's an opportunity to empty the bench and allow some of those players that have to work so hard in practice but receive limited PT. You can't ask them to go in and 'take it easy'. Sports are competitive and there is no life lesson in playing against someone that isn't trying. It's degrading, IMO.
As a coach I would use those games as an opportunity to give some players experience in other positions b/c you never know when an injury will change the make up of your entire team. I would never, however, ask my players to stop playing with anything less then their best effort.