I was working up a thread in my mind over the past few days, where I was going to discuss why the rise of the UFC(and MMA) in popularity in the US was important and a positive impact on our society and its youth in particular. After reading this thread, most of what I would have argued and other points I wouldn't have, seem to be sufficiently covered.
Like it or not, fighting is a way to solve problems on just about every level. We need to be a society of warriors, and having a public display such as the one the UFC puts on, is a positive model for us to embrace. Now before anybody goes off the deep end, I have trained young kids in basic MMA techniques. Some as young as 4-5. What they learn in those classes is not simply about beating up people. They learn how to fight back, but they also learn to respect their opponents(and themselves), and they also learn when to stop which is probably the most important thing for them to learn. Its the ones who have no training or discipline that you have to worry about in a fight. The ones that have the parameters built into them from a young age are fine for the most part.
As for the school, they'll likely lose a suit and deservedly so. Although I agree with the idea of a boxing ring(or cage in this instance) in a school for this purpose(as long as it supervised), they didn't get parental permission. If you need parents to sign a slip so you can go to the museum, you are going to need one for them to participate in a physical act of this nature.
I'd actually go so far, to say that I would like to see self-defense classes taught at the jr. high/high school level as part of the physical education classees.