This story is just completely stupid. Or rather, the the vice-principal is completely stupid. I'm an atheist, and pretty openly so, so it's not like I'm prone to coddling the God Crew when it comes to thinly veiled proselytizing masquerading as "private worship." But this is just moronic. What purpose is possibly served by preventing any student from reading any book (other than "controlled" books such as pornography, and there are undoubtedly people who would argue with that distinction)?
I'd be happy to see students reading The Bible. Or The Koran. Or The Age of Reason. Or The Necronomicon, for that matter. If they're reading, they're using their minds. Hopefully, when this girl reads her Bible, she actually thinks about what she's reading, whether to evaluate it critically or to figure out how the various teachings fit together into a single whole.
Imagine the uproar and protests if the school had prevented a student from reading The Koran. Muslim advocates would be up in (metaphorical) arms about this perceived attack on their religion. If I were cynical (OK, a touch more cynical), I'd say this was done deliberately to set a precedent for when a Muslim student is targetted by this sort of arbitrary censorship. Not that I think the girl was put up to this, but to the vice-principal, this could have been a God-send.