In this case, like the Boy Scouts of America's journey to the U.S. Supreme Court to establish their right to exclude gays, I can't say with comfort that the judges got it wrong. Private organizations with a religious element which declare in court that an action is part of their religious ideology probably should, under the First Amendment, have a right to exclude people (although not necessarily without consequences, as the BSA has discovered).
What leaves me puzzled is why this school, or the BSA, would declare themselves to have such an exclusionary policy. The BSA that I earned my Eagle Scout award from was a more tolerant organization than the one that exists today. Similarly, in all the time that I was a Lutheran, I was confirmed and attended a Lutheran church until I left for college (and at all the times that I have returned to Lutheran church services for family functions), I can't remember a single tirade against the evils of being a lesbian, or even soft spoken whisper from the pulpit to that effect. I've met Lutheran lesbians in passing who co-existed comfortably with the church. This is not a typical core principal of this Christian denomination. A California law blog explores the absurd conduct by the school that led to this outcome.
Of course, part of the mystery is solved by the fact that this school is not run by the dominant mild mannered mainline Lutheran denomination known as the Evangelical Lutheran Church in America (ELCA for short), which accepts gay marriage (German Lutherans currently have openly gay clergy). Instead:
The School is a nonprofit corporation. It owns and operates the California Lutheran High School, a private religious school in Wildomar. The School is affiliated with the Evangelical Lutheran Synod (ELS) and the Wisconsin Evangelical Lutheran Synod (WELS).
The ELS and WELS are comprised of Lutherans who secretly wish they were Pentecostals or Southern Baptists, but can't stand non-monotone sermons, bad music and white suits. (WELS also has it in for just about every other religious denomination including conservative Missouri Synod Lutherans.)
In all honesty, Lutherans in the ELS and WELS probably resemble the Lutherans who were Martin Luther's original followers more than the relatively milquetoast ELCA Lutherans, or the adherents of the establishment or recently establishment churches of Northern Germany and Scandinavia. Then again, it isn't obvious that he would have persisted in those doctrines had he experienced our world.
The leadership of California Lutheran High School, in contrast, do live in our times and thus, have none of the same excuses available to them. We can only hope that their public adherence to a bigoted creed attaches an appropriate stigma to their sorry excuse for an educational institution, for it certainly is not an institution that anyone I know could be proud of graduating from at this point in time.
In solidarity with the two young women expelled in this case, I encourage you to read Simply Sarah, an award winning webcomic about young women facing similar struggles.