It's not a Christian schoool... it's a public school.
Ah, sorry, I misread "after a handful of Callaway Christian Church members complained." No, in that case this is really over the top. "Grease" is not exactly great drama, but I'd say it's pretty harmless. And certainly "A Midsummer Night's Dream" is exactly the sort of play that students should be doing.
We should have more Shakespeare in our schools, not less.
And the same type of censorship would have been applied if the teacher tried to do a Passion play or if they tried an oratorio like The Messiah.