Question: What are the common mistakes regarding internships?

Response: I won’t call these mistakes. There is a lot of misunderstanding about Internships from all the stakeholders. Here are some examples..

Student’s point of view...

Many students consider Internships as a birthright, partially because of their college. They often consider it no different from taking another course or subject. In reality, an Internship needs to be earned.
Once an internship is secured, many students want to achieve something big in a short time span of 1–3 month. Even before they learn how to walk, they want to sprint. Very very few interns can make productive contribution from day one. Most do not make any serious contribution.
Most students are not familiar with corporate work environment and look for a defined and structured [as happens in college] routine in corporate. Sadly, corporate life is full of ups and downs. Urgencies, high pressures and impulsive actions are common in corporate life - most student interns don’t get it.
While many students come for learning, they don’t find the teachers to teach them. In corporate, there is no structured learning system and student interns often find themselves lost.
Student interns either find them over exploited or under utilised most of the time. If they are capable of producing good work, they often get real work to be completed within scheduled time like any other employees. They feel exploited as they do not get salaries (often a meagre stipend and sometime nothing) but have to work like employees. Those who cannot produce quality work, do not get enough work in their plates or get mundane work which they don’t like.
Views from Corporate:

Most corporate see it as an unnecessary burden and do not support short term internship . Their resources are already over stretched to meet their business obligations and they do not see a business benefit by hiring interns for a short period.
Startups and small companies, on the other hand, do take interns to augment their resource base (often as free resources or with a small stipend). They expect the interns to work full time like other employees. Even they do not want interns for less than 2 months time and assess capabilities before taking the interns.
There is no structured learning plan for interns. Learning is considered as a responsibility of the students. Corporate offer a platform to learn and work.
My Views:

Internship is a great opportunity for the students to learn through experience. I strongly believe that it should be made mandatory both for corporate as well as students.
Startups and small companies are best suited for students who want to work and learn from their work experience
Minimum internship period should be 2 months and preferably 6 months.
Internship should be legally recognised as a separate category of workers — who are neither employees nor consultants.