Ask the student why he is here. ("Here" meaning: in school.)
He'll probably have an answer. And it will probably be wrong. And this is where, as an adviser, you have a chance to provide some advice to correct his misunderstanding.
The answer you need to teach him is the very simple, "big picture" thing that many successful professionals simply take for granted, but which he may not have figured out yet. Yes, you can let him fail out of the program, and let the system work, and let life teach him this valuable lesson the hard way. Or, as an adviser, you can give him this advice that he needs which will help him realize that he must abandon his quest of proving he's better than everyone else.
Here is the correct answer: Schools are not just for learning. Once, schools were a rare source of some knowledge, and they gained a reputation in society for being good to learn. However, now we have the Internet, and schools have lost some of the importance, that they used to have, in the role of being able to teach. This loss happened because there are now many other options that people have on how they can learn things. However, schools remain valued by many people in society, because they fulfill another important role.
Schools are a test. They are a lengthy experience where you are likely to be given multiple requirements. Some people pass those requirements, and some do not. The people who pass those requirements tend to have developed a common set of abilities, such as being where they need to be, when they need to be there. They also have proven an ability to do the work that they are required to do. Some people don't like the requirements of an instructor, and disagree with the ideas of an instructor. Some of those people just do what the instructor wants, anyway, and they produce satisfactory results. Those people graduate. Other people insist on doing things their own way, and end up not producing the results required to graduate. The end result is that schools produce graduates who are people who have learned to fulfill requirements. So, the other big role that schools have is to serve as testing grounds that weed out graduates from people who are not able to graduate. Many employers, and project funders, appreciate this task that schools perform, as they provide opportunities to graduates.
If a person finds school dissatisfying, sometimes the best thing to do is to just be dissatisfied, but fulfill the requirements and get through the program and become a graduate. Whether a student is smarter than the instructor, or not, is not the point that this educational system is out to prove. In some cases, students may actually be smarter about some topic. In rare cases, that might even be the subject that the instructor is teaching. Still, the system has the instructor put in the place of authority, and so the student's role is to fulfill requirements.
After you've had that conversation, any submitted "gibberish" can be marked as not fulfilling standards, and he'll be able to understand his weakness, even if his only weakness is that he's not fulfilling standards. Perhaps the part of this conversation that is nicest for you is that you'll also be in a position of being able to quickly address the issue effectively, simply by saying that he needs to pass this test of society. Then, whether he approves of society's test or not, he'll be in a position of easily being able to understand what must be done. The requirements will also make more sense to him, because the requirements being asked of him will match what he feels like he needs to do in order to fulfill the goal of being able to graduate, instead of feeling like a mismatch from his current goal (which might be to learn and become more skilled). As is, it seems this student has some pride, and he might even genuinely feel that he is morally obligated to win the contest, because it would be immoral (dishonest) to stoop to the level of treating the instructor as a superior when the instructor is clearly not smarter than he is. The point, though, is that the instructor is in a position of being treated as the superior.
Point out to him that as he moves through is career, he may continually find that he must report to inferior minds. He must get used to being able to satisfyingly produce fulfillment, despite that. It is, after all, what Einstein did. Einstein had to convince people to proceed with a project. Right now, this student doesn't have an employer paying him to learn the lesson of needing to fulfill requirements. Instead the school is performing this role in society.
When he understands that this is society's test at work, he'll learn to comply. Or maybe he'll choose to fight all of society, but at least then he'll be making that decision from an informed point of view, rather than being misguided from his own dreams of grandeur. He'll understand that he didn't make it through the system, and it's not because the system was failing to give him the opportunities that he should have had; it's because he didn't complete the requirements.