According to the flight Instructor (CFI), he was demonstrating a soft field takeoff to the student pilot. The engine run-up and takeoff roll were uneventful. The CFI stated the airplane began to drift to left after liftoff from the runway. The CFI applied full right rudder but continued to drift left of runway centerline. Unable to climb, the CFI added that he saw 55 knots on the airspeed indicator prior to exiting the left side of runway. The CFI then decreased engine power, and collided with a parked hang glider on the grass taxiway, just prior to impacting terrain. Examination of the airplane revealed substantial damage to the firewall and right wing. The CFI reported no preaccident mechanical malfunctions or failures with the airplane that would have precluded normal operation.