Is there solid evidence the students had ever been assigned the set in the first place?
It is natural that after creating a set from scratch, or importing a set and not selecting to assign it to everyone, that it would be assigned only to the instructor. For it to have been assigned to everyone at some point, but then later to only be assigned to the instructor, would be a very odd thing, and rather tedious to make happen even if you wanted it to happen.
If the instructor didn't select to assign to everyone when importing (or thought she did but the mouse slipped in the drop down selection) this would be the expected result. Or if the instructor created the set from scratch, and never completed assigning it to everyone, this also would be the expected behavior.
But if there is evidence that the students had previously been assigned the set, then there is something serious to investigate. Evidence could be in Email Instructor messages, something in the answer log (File Manager -> up from the templates folder -> into the log folder), or server-side logs of activity.