Our private parochial school plays flag football in a league that doesn't allows mixed teams. We had a girl on our team who was allowed to practice and be on the sidelines but wasn't allowed to play. No one made any kind of fuss about it, including her dad, who happened to be the football coach.
In this news story, my guess is that something happened behind the scenes that the CEO (why isn't he a principal?) hasn't made public, and I'd guess it was a donor who had an issue with the girl being on the team.