Why not just always offer to give the student a copy of the letter?
What have you got to hide? I don't always do this myself, but I
know several colleagues who do, and if a student asked for a copy
of the letter I certainly wouldn't mind. Even without seeing letters,
students probably have a pretty good idea of who's going to say nice
things and who isn't. If I feel that someone else could write a better
letter for a student, I always tell the student this and suggest that
they not ask me for one.
At my university (and I believe elsewhere) there's an even more
sophisticated system in place for med school applications. A faculty
member serves as a pre-med advisor, and letters of recommendation
go directly to him. He then selects excerpts from these letters
which get sent on to the schools. It's in his best interest to get
as many of our students admitted as possible, so he's going to select
the most favorable comments. He could even quote letters out of
context if he wished. Compared to this system, a student who asks
for five letters but only sends the best three is almost being
objective!