At least until the complaints from the rest of the world got loud enough so that a day later, they made hasty and embarrassed about-face, inventing a lame excuse for what they did.
It seems to me that things like this happen a lot, and that college censorship of the newspaper is something that is never going to go away. Back when I was in college in the late 80's, there was at least one edition of the newspaper that the school censored and confiscated. And then, as now, there was a massive backlash from the students and parents (although I don't recall it getting the attention of the local TV stations.)
You would think that school administrations would finally learn to face reality. If they want control over their paper, then they should run it and drop the illusion of it being a student-run organization. I believe some schools do just that - by making a school employee editor-in-chief. Under such a circumstance, nobody is under the illusion that the paper is somehow independent. If they aren't willing to actually take control, then they should drop the idea that they somehow have the ability (let alone the right or obligation) to censor it. Either the paper is free or it is not - you can't have it both ways.
I realize that courts have said that a school-financed organization operates at the pleasure of the school. As A. J. Liebling wrote, freedom of the press is guaranteed only to those who own one. In this case, the university owns the press, because they are the ones paying for the publication. They, therefore have the right to decide what gets printed. But legal rights don't matter when attempts to exercise such rights will almost certainly result in an embarrassing response that is worse than the result of not exercising them. If the school is going to get heavy-handed, then they should only do so when the offending material is illegal (like incitement to riot or actual pornography, where publication could result in legal action against the school) and not merely because a school administrator is made uncomfortable by the subject matter.