The main problem here is the court.
I sincerely disagree. The main problem is the stupid idiot liberal educators who encourage 'Mexican identity' and 'multiculturalism' rather than encouraging patriotic displays that are inclusive of all the student body (you know, like the US flag.) That was what created this problem, and the courts are stuck with stupid decisions of supporting the school in banning the display of the US flag as it might incite violence from those the school has encouraged to believe in their 'Mexican' identity.
The court dances around that very central fact in the case, but the parents should hold the school accountable for their horrible decisions that has led to this situation, and quash the segregation of the student body into identity groups.