1. Boycotting is pretty far removed from prosecuting Berkeley for treason or taking away Berkeley's citizens' rights. They absolutely have the right to do SOME of what they've done here, including to pass resolutions condemning the war, the Marines, motherhood, apple pie, etc.
2. But IMHO, the federal government has the right to condition its supply of funds on at least EQUAL treatment being accorded to military-affiliated tenants. When Berkeley's government officially grants special permits to protesters on a NON-content-neutral basis -- to Code Pink, which received a permit to park its truck directly! in front of the recruiting office, because Berkeley knows that such a group is virulently anti-Marines -- that government obviouxly is not playing it "neutral." No law requires the USA to continue to supply discretionary funds to such a government.
Your references to burning down houses and requiring loyalty oaths are, to pick a kind word, misplaced.
I agree....just thought the US would just do what it did the first time...