Being able to discard your whole hand and get a new one seems to me like a big problem. Coming from a long time MTG Player I know Deck building is an important thing. This is why everyone seems to just play what they need for a Big Kill. Add in Reshuffles every were and its just to easy to get the Perfect Combo. If it was a One Card Draw per round then Deck Design would be needed.
Deck design IS needed. MTG has mostly damage cards and you can cast any card that is in your hand. Wizard101 is different in the fact that it has mostly buffs and shields and you cannot cast anything in your hand because you have to wait for pips. Being able to throw cards is a good way to strategize because you can set your deck up for any contingency and then discard what you don't need. If you are "Having" to throw your entire hand to get an entirely new one then you probably DO need to think more about deck design. Reshuffles are critical for long matches. The primary reason I have had to reshuffle is NOT because I have been discarding most of my cards but that I have been in a battle long enough to cast 50-70 spells. In those cases, it is usually the person who has come prepared with reshuffles that wins.
An interesting post- however, keep in mind that the target audience age of Wizard 101 has been listed to be 6-12 or 9-14. The concept of deck building exists on a more flexible scale- than that of MTG...which, was never intended for an audience so young. MTG had been marketed for the 13+ age range- dominated largely by the 16-19 and 20-23 age bracket.
The card mechanics- as well as the initial reaction to setting cards in play, creating the deck and utilizing the deck...are very adoptive of the audience (which the game has been designed for).
Discarding cards- neither functionally, nor mathematically...determine the outcome of the winner. Doing so- simply adds a new set of cards to your hand...it does not mean that you are ready (or even able) to play those cards effectively (against your current opponent). The reshuffle card certainly helps if you choose to rapidly discard for a needed type of card (be it shield, heal or other). However, it would also have a valid use for the "tighter" decks, schools lacking at heavy hitting/per pip ratio, utility cards (steals, disarms).
This allows many individuals to create a deck that they can (mostly)- be satisfied with...keep in mind, within Wizard 101 you are already limited due to your choice of school. A further reduction- would certainly never enhance the overall playability...or excitement within a match.