Social sanction and government sanction are very different things.
I believe OU has destroyed the Fraternity, and thereby tainted everyone who belonged to it, all on the basis of what those people in that video did.
Unless that small handful of people constitutes the bulk of the Fraternity, I would say that the people in power are guilty of the same offense they complain about; Judging people as a group, rather than as individuals.
Do you believe everyone in that fraternity condones what those people did? Should everyone in that fraternity have to bear the consequences for what those few did?
Oh, and to address your point about the difference between social sanction and government sanction :
The University of Oklahoma is a state-supported institution of higher education supported by legislative funds derived from State of Oklahoma tax revenue. As a state, tax-supported institution, the University gives preference in tuition pricing to residents of the State of Oklahoma.
It would seem that government sanction applies here.