I have taught functional programming using Scheme and Racket. I like them in many ways. I still think they suffer from some of the issues common to dynamically typed languages, but they fix a lot of the issues, especially is you use an editor like DrRacket because scopes for names are so limited in those languages and many typos can be found by the IDEs.

As you say though, language popularity does impact many departments. I think industry has become much more polyglot that it was in the 90s, but it is still challenging to argue against languages that aren't in the top 20 in things like PyPL or Red Monk.