I think Mark didn't go into those schools with competing product with the goal of going head on with the competition, but to test the riskiest assumption that he is "building something people want". Going into the school with existing product is the riskiest move, so it should be tested first.
According to his talk, Facebook went into schools with existing social networks in order to demonstrate to themselves that what they were making was the better option. "If we can win in (these schools), then we can win everywhere" to paraphrase horribly.
