Thanks Richard, Dave, Ken and Garry for your replies.
I like Dave's suggested presets for document types within the assignment and a site-level setting to associate documents formates to document types. A default configuration as suggested by Dave would give ODF equal footing. If a particular institution has particularly tight COEs and want to be annoying, they could change it at the site level, yet teachers who want to provide their own list can still do so at the activity level using the "Other" field.
I'm not yet convinced about the course-level override, because this would require an additional "Assignments in this course" settings group somewhere in the course edit page, creating additional clutter on an already very long and difficult to use form. Additionally, not all assignments in a course are going to require the same file type submissions, so teachers would still have to verify or modify the settings when creating new Assignment activities. In my eyes, for the moment, the benefit of saving time when creating the dropbox for "Essay 2" does not yet outweigh the clutter it woudl create in the Edit Course screen. (But this is why we're having this discussion.)
Thank you for mentioning Google Docs submission, Ken. Good point.
Garry, I'm not sure I understand the difference between "restriction off" and "any file" in terms of how teachers will understand the usage of the feature.
But thank you Garry for raising the fact that the restriction, if set, needs to be displayed to students. Very important.