I'm fully in favor of using Darija, because of the huge impact it would have on the creation of a reading culture. Imagine: All children's books right now are in Modern Standard Arabic, which is a language no one learns until first grade (i.e. age 6 or 7), by which time reading habits are already in place for many kids.
I think this is a crucial point. Developing a literature of sorts in Darja would allow kids to get into the habit of reading way earlier. A fair number of kids in the West are reading by the age of three; for an Algerian or Moroccan kid to even understand much of the language his/her books are written in at that age would be unheard of. With Darja literature for them to use, they could start reading before they ever started school; it might even lead to them acquiring literary Arabic faster. Moreover, an oral literary tradition already exists, best exemplified by the traditions of melhoun poetry and chaabi lyrics; the language used in these is recognizably a literary register, and all that would be needed would be to write it. My puristic instincts would also rejoice in a move with the potential to stem the tragic loss of inherited vocabulary, and overuse of French, now afflicting Darja. And after all, why should Arabic-speaking kids continue to be deprived of the chance to read in their native language now that Tamazight-speaking ones are finally getting that chance?
However, I would envision Darja as a supplement to literary Arabic, not a replacement. Arabic connects Algeria (and no doubt Morocco), not only to the Arab world but to its own past, not to mention allowing it to engage more fully with its religion. The language in which Amir Abdelkader and Ibn Khaldun wrote - and of which generations were deprived by French rule - should always be a crucial part of an Algerian education. Also - as the ongoing struggle to get adequate higher educational textbooks published even in literary Arabic reminds us - a written Darja would take centuries at least to build up a literature comparable to major languages.
As long as I'm pondering educational policy, what should be done with foreign languages is obvious: end the domination of French. Nothing wrong with French per se, but an all-French policy is a handicap in a global context, isolating Algeria in the ghetto of Francophony at a time when English is a prerequisite to serious scientific work even in Paris, and an embarrassment at home, where it remains a scandal in conservative eyes. From 3rd grade on, have a choice between French and English (and maybe even Spanish) as the second language, and raise a generation of educated North Africans that do not all share a single foreign language; only thus can the domination of French in North Africa, with all its attendant sociological divisions and economic problems, be ended. Of course, in an educational system that has a serious shortage of good teachers as it is, this is a distant dream... but dreaming can be useful.