"Sir" or "Madam" is certainly not necessary. However, any half-decent student would use "Mr.," "Mrs.," or "Miss."
I agree, though it still shouldn't be required.
So kids should be allowed to address their teachers by first names without their permission? This is the moral decay of this nation right here.
How is that an issue of morality? Respect, maybe, but morals?
Some teachers do not mind being called by a nickname relating to your first name. As with anyone, the polite thing is to call them as they want to be addressed. But not doing so is bad form, not a display of "moral decay of this nation" or some crap like that.