The fact that the lawyers took the case suggests there must be some merit to it.
No doubt, there's more to the story. No one is defending the student. We don't even know what the student did. That doesn't change the fact that the school handed out laptops with cameras that worked both ways and that the school could spy on the laptop users, without informing them in advance of this capability.
Could the school use the excuse that they included this software so that if the laptop was stolen or lost it might be found more easily? This will be an interesting case to follow.
Maybe, maybe not. A lawyer doesn't have to prove something is true in court in order to win a large award or settlement. He just needs to make a jury or judge believe that it is true. Perhaps there is a grain of truth to the schools surveillance abilities. Perhaps they could monitor a student if they suspect, via other sources, that he is doing something illegal.
On the other hand, it is interesting that a prosecutor has apparently declined to get involved even though if what is alleged actually occurred, the school would have committed numerous state and federal crimes.
Hopefully we will find out the truth eventually.