The draconian 'decency' and 'morality' standards are probably among the things causing the lowered enrollment over the last 10 years or so. Most Catholic schools are seeing enrollment levels at half of what they were 50 years ago, and between tuition, poor education, the rise of the "nones," and these stupid rules, they're driving themselves out of business basically.
The schools are hurting so bad, that if I were a parent, I'd sure as hell be threatening with my wallet - revise the rules, be more transparent about it, or we're out. I don't think any parent could've seen the situation in the article coming from a mile away, and the moms even went shopping with their daughters to make sure the dress met the rules and then suddenly it didn't when it came down to the day of and the girls got pulled out of line and shamed in front of their fellow students. That's something no school should ever do to its students and in this case? If the school does it again before the end of the school year already paid for, I'd probably consider filing suit. Not to mention, they post the rules and won't accept photos in anything under two months to prom which is almost no time to get alterations done.