Accdg to the SCOTUS ruling: A principal may, consistent with the First Amendment, restrict student speech at a school event, when that speech is reasonably viewed as promoting illegal drug use. In Tinker v. Des Moines, the Court declared, in holding that a policy prohibiting high school students from wearing antiwar armbands violated the First Amendment, that student expression may not be suppressed unless school officials reasonably conclude that it will “materially and substantially disrupt the work and discipline of the school,”.
The banner was unfurled directly across the street from the school, and pointed in the direction of the school and students, therefore it was in the Court's opinion, a disruption of the school and it's discipline.
Why do schools have extra constitutional protection from “disruption”. Every other institution, even private homes and businesses have to put up with disruptive protests where banners are unfurled directly across the street from them, if protesters feel so inclined. What makes schools immune to protest and able to suppress freedom of speech even off of school grounds?