Proxy Servers

[trlists at clayst.com]

I am familiar with the general idea of proxy servers, which I 
understand to be to provide caching, filtering, and perhaps logging 
and/or authorization checks, for access to the wider 'net from inside a 
corporate or institutional LAN.

However I've never worked with them so I'm curious to get some opinions 
about a situation I ran into.  Specifically, a relative recently 
informed me that in order to get into a local university network to 
access some class materials held at the campus library web site she had 
to configure her browser to use the university's proxy server.

Am I missing something, or is this a completely backward use of a proxy 
server?  It also seems insecure as anyone with access to the proxy 
server can then read all her web traffic.

I do get the idea that the university would require a proxy for users 
on its internal network to access the web.  But is it really sensible 
to do it the other way around, or is it as clueless as it looks to me 
right now?

Thanks for any info,

--
Tom