I had never heard of self-plagiarism until early this year when I started working for the University of Phoenix, which officially considers it an academic violation.
I think it is a policy that should be taken with a grain of salt. If I found a student was guilty of self-plagiarism, I would consider very carefully the circumstances of the offense before reporting it as an academic violation.
If the self-plagiarism was done to avoid doing the required work, such as by simply regurgitating all or most of a paper the student wrote for another course, then I would probably report it and award zero points for the assignment. On the other hand, If the assignment excerpted part of a previous paper within a mostly original paper demonstrating that the student did the work required for the assignment, then I would not report it as a violation but might reduce the point total a bit.