one of my co-students refuses to learn
That's all you had to say to prove he's an idiot. Doesn't matter what that kid says, he's an idiot. Why would you "refuse" knowledge? Regardless of the subject, it's not like our brain has limited storage capacity. Although, it sounds like his does.
he claims it is dead (according to his father who is an important CIO).
Everyone's Dad is important. Also, from my experience, CIO's are not people you want to ask techy questions, so just know that. They know more business than they know IT, which is why they are business executives. Asking the average CIO where tech will go in the next x years is like asking my 8 year how he should be raised. CIO's are a product of tech, rarely the other way around.
He told me that in many companies installing Navision or any kind of Microsoft product like that is against company policy because that software is 'horribly inefficient'. I am not sure of the details.
I've never seen a company policy (in my studies or IRL) that stated anything like the above. An Acceptable Use Policy shouldn't specify individual products, unless used as an example (e.g. "No music apps like Spotify"), but I've never seen that either.
So assuming Navision is dead
It's not.
then why does my university put it in its program? Why is it 'a preparation for the business world' if the software is allegedly dead in use?
First, M$' Dynamic Suite:
The Dynamics suite is not dead. In fact,
this study shows it still has 11% market share ending 2012. That's not much, but that's also not dead. Also too, my company still used it up until this past February for our employee espresso bar register (primarily because we had to maintain two inventory databases and were waiting to be able to incorporate with our inhouse system to make that leap away from dynamics), and we're a top 100 internet retailer, and part of (one of) the largest retail conglomerates on the planet! So, for his "CIO of Bob's crab shack" of a Dad to say that anything is dead... I would take that with a grain of salt. Maybe even a lot of salt.
Sounds like a spoiled kid who doesn't know the value of knowledge + experience.
So why teach it?
M$ Dynamics may not be dead, but it's not exactly thriving either. Either way though, it is a good platform to teach students how different software packages interact, from the user experience to the backend data storage in SQL (Schools also get M$ products at very low rates).
You should pay attention because even if you never use that product again, some principles are universal. I'll also emphasize this point again, there is true value in knowledge + experience. Refusing either of those is for the foolish.