Live Oak is a campus with an especially large Mexican-American student population and the PC police told the students they could wear their gear "on any other day, but today is sensitive to Mexican-Americans because it's supposed to be their holiday..." The students at the center of this "scandal" said school administrators called their tee shirts "incendiary" and worried they would lead to fights on campus. (Perhaps something like this?)
"They said if we tried to go back to class with our shirts not taken off, they said it was defiance and we would get suspended," one student told the local news. After refusing to remove their shirts, the students went home to avoid suspension.
Many Mexican-American students reportedly said they were offended by the students wearing American colors on a Mexican holiday.
I would like to echo Glenn Beck's reaction from his morning radio show today: This country is supposedly a melting pot of different races and ethnicities. You are in AMERICA, not Mexico. MELT!