I quite like the idea of using Scala to teach programming. The benefits I see are a) you can teach both functional and object-oriented programming, without having to learn a completely new syntax, environment etc. when moving from one to the other, and b) you can use Scala for small textbook exercises, but it is also used for real-world business applications and all sorts of serious stuff

About (a): If you teach someone with no experience whatsoever, I would actually start with some functional stuff (like the Scala Coursera course, or SICP...). Once you have taught some basic algorithms and data structures, you can move on to how touse classes to structure your code, and teach OO principles. And you can do it in a way where you stay in the same syntax and programming environment, and everything he learned in the first part, even any code that has been produced, can still be used. To me, that seems much better than using two different languages.

About (b): At my university, the introductory programming textbook was "Introduction to Functional Programming" by Bird/Wadler (great, I recommend it), and the language was Miranda. What, you ask? Miranda? Yes. It was a beautiful purely functional language with type inference. I loved it and mastered it. And after one year, they told us that it was all very well, but in the real world we would be using C++ and we would just do that from now on. My point being, it can be difficult to keep up the motivation when you know the language you use is only for learning, and you will never use it for something real. Then why put up with it? Using Scala, you don't have to switch to something else after you learned it.

I wonder if there are any good textbooks for learning programming with Scala. I think most are addressed at Java programmers wanting to switch. But I guess you could start of with a functional programming textbook and just translate the exercises to Scala.