A fine post.
Linda Vester discussed this priest's actions on a segment of her show today, and then asked the audience if what the priest did (expelling kids from CCD and barring them from First Holy Communion) was right. There was a resounding "NO" from the audience.
No one should ever be denied the opportunity to be exposed to Christian religious education (from the Catholic end). If a priest (or any other Catholic officials, teachers, etc.) becomes concerned that people are not showing up for Mass, there are other ways to address the matter and to try to increase Mass attendance. The circumstances under which anyone should be denied admission to Catholic educational programs should be handled with the utmost care and only for serious reasons. For the children, this is likely to be recorded in their memories as a negative experience with Catholic bureaucrats.
But, hey, Eucharistic Adoration and the Latin Mass ( or at least some Latin sacred music in the Adoremus. style) are THE BEST ways to boost Mass attendance. Hands down.