its wrong...! and some companies thoroughly exploit experience hungry undergrads and even make em' work wknds and say they had no budget for an extra hand, however if you are willing to learn under the best brains...well... true story!
unfortunately i dont think its illegal(not sure, I'm not a legal person) as it operates under willing buyer willing seller... as in no one's forcing you to go work there AND you need the experience to pass your practicum semester... quite unfair if you ask me...

Suffer peacefully, most places do not pay interns.

And while we are at it,I've got a newly minted computer engineering grad looking for an intern. Any leads would be greatly appreciated. Holla me at icapital.consult@gmail.com.

@bkismat, thats very true. Its crazy. I was lucky, i did my internship at KCB and they paid 20, 000 a month. I was there for 3 months. The work load was okay although they were not very keen on giving us students very key resonsibilities. I was in the IT deparment. The most i did was repair computers, installations, configure new machines answer the telephone and observed other IT guys do their thing. When there was nothing to do i would surf and read the newspaper as i eagerly waited for 5 P.M. But it was a great experience anyhow. Met this dude (he was about 40 0r more years old) who was a manager and didnt even have a degree but had worked there for ages. There was a threat on non degree holders so he was struggling with his undergrad. He was a 1st year at that time while i had just completed my 3rd year. I found that very interesting.

@Cardinal, Thank you very much. Internship is very important and companies should really embrace it. It is actually helping the community and campus people have a lot of fresh ideas that can be very essential to the company.