I'm almost ashamed to admit this but it wasn't until recently that I really got the purpose of review pieces. It only took me seven years to figure it out but I guess better late than never, right?
To clarify, I have always had all my students do review pieces. I warm up with review pieces in every lesson. I would use review for exercises and drills. I would have my students do review pieces only (never current) when performing at our solo recitals. So it wasn't as if I didn't understand the value of review.
What eluded me up until recently was why a student should really maintain all her review pieces. When a book three student came into a lesson unable to remember book one's Happy Farmer, I didn't ever sweat it. I would tell the student to clean it up at home and maybe the student did and maybe she didn't. The end result of this was an entire studio full of students reviewing only the pieces they liked and remembered how to play.