Why should universities be under any more of an obligation to stop copyright infringement than any other ISP?

They should not. However, the RIAA goons latch onto them because of the uniqueness of their constituencies. Most ISPs have to compete to keep their users, this means they must make them happy or they jump ship. A college student can't just get angry and leave the university (especially if they are in a big university). Well, they could but "Darn it Harvard I am going to get my education somewhere else" also gets them a different product.

There is nothing stopping you legally from working and distributing this project. The only licensing problems I can see is that linksys might try to sue you for distributing their binary-only driver. I have not read the license terms of that drivers, so I do not know if they allow re-distribution of it or not.

Worst case scenerio (for sourceforge), ship the sources without the binary driver. If you decide to not go with sourceforge, there is NOTHING IN THE GPL which REQUIRES you to distribute sources to linux kernel drivers that you distribute with your distribution. There are MANY linux distributions out there that distribute linux binary drivers without source. For instance, any distro which ships nvidia drivers (which is practically ALL of them). This is not a violation of the GPL, as it is legal for you to ship packages with seperate binary files provided they are not derrived from the GPL works. (which they are not.)

Anybody telling you otherwise has no idea what they are talking about. This has NOTHING to do with the GPL or copyright law, and EVERYTHING to do with GPL zealots who want free wireless drivers. I say to those people: if you want it, write it yourself or petition the copyright owner to release his sources.