Spelling Not Stressed by Teacher

Last year, my niece was a fifth-grader. When I was trying to help with a school paper, she told me she didn't have to correct her spelling on school papers. She only had to spell correctly on her spelling tests.
I was convinced that she was mistaken and made her correct all her spelling mistakes. The next day, my brother spoke with the teacher. To our astonishment, my niece was correct. The school assumes that in the upper grade levels all papers will be written on computers, and spell-check will take care of the spelling. By the way, the teacher thought the logic was as flawed as we did. What do you think? - For Correct Spelling
Answer: Fifth grade is a bit soon to throw in the towel and no longer stress the correct spelling of words. Each time a child misspells a word and it is left uncorrected, the misspelling is reinforced. We don't think the teacher should correct the misspelling, but circle it so the student can correct it.
There are several flaws to relying entirely on computer spell-checkers to catch spelling errors. First of all, you cannot rely on spell-checkers to catch all errors because they do not always catch homophone errors (war, wore). Admittedly, they are getting more context-sensitive. And relying on spell-check and grammar-check as well can lead students to abandon the important final checking of their work.
Even though this school does not stress correct spelling, misspelling words can affect how teachers view students' work. Some students may spell so poorly that it is impossible to know what they have written. Furthermore, at the present time, plenty of handwriting is still done on classroom work and tests at most schools.
Finally, the experts weigh in on both sides to this question. Some think relying on computers leads to skill losses in writing. Others believe skills lost by spell-checkers are being replaced by other skills, such as better research skills. We'd love to hear what teachers and parents think about this issue.