Did you think the public had a right to see Hillary Rodham's thesis from Wellesley college when she ran for Senate? Many on this site did.
And I resent this commercial site getting and archiving my child's intellectual property for free...But the public school system MANDATES my child's term papers be submitted to this company.
Have you complained to your school and school board? Do other parents agree with you? In the end, what your local public school does is a local issue.
As I teacher I know there are other methods of detecting plagiarism that don't require use of outside sites, but do require more effort (and a bit of technical savvy) by the teacher.