I don't know how bad your hands are, but we all have limitations. Some self imposed, some physical. We all need to sort out what we want and what can realistically be accomplished.   

I have been here for 3 years, took the Fundamental courses. But really I am here to learn songs. I can't play all the songs the way they are taught, but I figure it out. All I need to know is what chords are being played and when. And then find an easy way to play the chord - usually a power chord (2 fingers). Something you will learn is that there are various voicings for chords. They sound a bit different from each other, some are fuller and brighter but in essence a C is a C is a C. And IF you are just looking to jam to your favorite songs with other people or to a jam track, an important thing you will learn is that the drummer and the bass player really carry the tune. So just stay in step with the bass player and nobody cares. Unless you are in a recording studio or gigging for money. Then its different and you really need to be pretty good. But if like me, you just want to play songs and enjoy yourself and have no pressure as to how good you have to be... you can learn guitar.

So its dissapointing that your teacher didn't address what appears to be a physical limitation and say "hey, all is not lost, we just need to find work arounds that will get you playing."

Good luck.

Edit: again I don't know your situation, but for all of us, our hands change with practice. We gain dexterity, flexiblity and strength. So what you have today will not be what you have 3 years from now.