I would think that school rules, which sometimes regulate behavior even when off school property, might be more effective in pursuing this sort of thing vs. the juvenile legal system.
It is odd that the court didn't find the student impersonating the principal online to be problematic.
One other clarification is that posts on a site like MySpace don't have some sort of "free speech immunity" - if MySpace determines that a post violates their terms of service, they can delete it. I always get a chuckle when a member at one of my forums complains that I have violated his/her right of free speech after I have edited or removed a TOS-violating post.
Hmmm, I didn't interpret the article correctly on first reading. Apparently, there's a third party involved in making the page "purportedly created by [the principal]". I wonder if that person was prosecuted in some manner.