I am a TA at a University and yes we do use code snapshot tools but for confidentiality reasons I cannot tell you which one we use. It works extremely well for checking plagiarism, but that's about it. I don't know what other metrics you obtain, but I think it is pretty hard to trust someone's code without reviewing with them. We also automark their code and provide a grade and use this to track progress, but this is only a portion of their overall mark.
From your comments - My big question is that it seems that they are familiar in the Academia, but not so much in the “real world”.
This is a common issue, don't be alarmed. Continuing from my above point, during code reviews, I find that many students are unable to clearly explain what their code is doing. Part of the blame is that students use trial and error approach until they come up with some code that works. Since they are actually unsure what was wrong to begin with, they cannot explain why these "trials" fixed their problems. Hence, we have code reviews to get a more realistic view of the understanding of students as well as reiterate concepts to students.
EDIT: Weekly assignments are meant to be 2 hour workload and are purely automarked, while bigger assignments spanning 3-5 weeks are the ones we perform code reviews on.
To address your second question, we have weekly assignments that weigh very little for the sole purpose of "practice" assignments. The student submits their code and it is run against an automarker I write for feedback. We do track improvements on every run of the automarker to see roughly how much a student is able to improve their code in 1 run. We usually run only 2 automarkers and the second run is their final mark.
As a final note, I recommend a Code Reviewer as a teaching assistant tool. Students post a segment of their code into the system and either professors, teaching assistants, or even fellow peers can highlight questionable code and write comments. This allows students to learn the "what", "where" and "why" their code has problems and "how" to fix them. My arguement is that codesnap shots are good for checking against plagurism, but other metrics can't really reflect whether or not the students are learning from their mistakes.