This isn't a black and white topic by any means. As opposed to most others, I see it the other way around. I've lived most of my life with the "ivory tower intellectuals are keepin' us down, man!" argument, and bought into it for a pretty long time (you usually hear it sometime around the age of 12, just after a teacher has taken away a comic book or pulp novel). I don't buy it anymore. I stopped when I began reading the lit classics more broadly and realized that the majority of popular genre fiction was all about using colorful toys and writing soap-operas and most of it had next to nothing to say about the human experience, even when it was intending to, because it was so far removed from the human experience. There was lots of imagination, lots of melodrama, but very little depth or complexity (please note, all these statements are qualified).
There are "literary" writers that hack it out, hitting the marks that "lit" readers expect, to be sure. But on the flip side of the coin, a lot, a LOT, of genre fiction is pandering and juvenile, giving the audience exactly what they expect.
It sounds like, from the syllabus, that your Professor is actually being pretty open. If you wrote a story set on mars, or that was thoughtful about how some advance in technology that currently exists effected people, I'm sure he wouldn't consider it the type of genre he's barring (I mean, DKT is incorrect, your Prof is pro-Bradbury, as well he should be). It would still *be* genre, of course, but worrying about exact definitions in an inexact world is a whole 'nother kettle of fish. If you write a story that exists simply for a twist ending, or is more about a neato-keen idea you had for a cool zap gun, then he'd probably reject it. It's all about focus, control, scope and intent.
DKT has it right about his old class. Writing within the parameters of normal human beings and the world they live in is a great discipline for early writers, removing the crutches that genre offers and making you walk on your own. It's the equivalent of learning to paint still life and human anatomy before doing whatever crazy visual thing you wanted to do as a painter. There are a lot of writers who NEVER took the time and they hack out book after book, month after month, clogging shelves. They sure know (because they have to) what a highly sensitive, super-secret spy trained by the ninja insects of dimension Vlaaar feels and thinks like. Too bad I don't.
One way of approaching this is to sample some short fiction from classic writers (Raymond Carver, Flannery O'Conner, Conrad, Fitzgerald) and then see if you could adopt their stylistic approach while incorporating some genre element. Just don't make the element the point of the story, make the people and their interactions the point of the story (I don't say characterization because that term itself has become something of a "learn writing and make big bucks"-genre crutch, turning out series of books that are soap-operaesque explorations of the mind of a single character. And, again, what Suzy Demonslayer feels about having slept with Gulath the Spiky for the *second* time - oh won't she learn her lesson! - speaks very little to me).
Good luck, though. I'm sure you'll do great. The fact that you wanted to discuss the friction and not just pitch a tent in one camp is a good sign.