OK, here we go again
There are some interesting talking points here. I read the article you linked to. What grabbed my attention was a comment in the article towards the end of the page saying the rule was in reaction to not to a specific instance but to other instances nationally in the UK where a photo of a student had been used in some fashion on the internet and the school was included in a lawsuit. So, strip away all the talk of protecting students. What I get out of this is the school is simply trying to limit their exposure to frivolous lawsuits. Sadly, that's a real concern. Even if you win a lawsuit, even if it ends up being dismissed, it costs A LOT OF MONEY. So institutions wish to avoid them at all costs.
So, I do NOT think the situation in the story is about paranoia - it's about the sad real fact that frivolous lawsuits costs people and institutions way too much money.
Which, to me, is a completely different scenario than someone fearing a picture of their child could lead to the child being harmed. THAT topic has been beaten to death in a couple threads already. I mean beaten, buried, resurrected, beaten to death again and repeated about 100 times.
Now, the question of the mom taking a photo of their kid kicking a soccer ball is another instance. We're missing a lot of information. For instance, the "complainer" - was it their stance that it was illegal for anyone to take a photo indoors where kids are involved? I'm not up on my Canadian law, but I think it's close to US law and it is NOT by definition illegal. In the US there is no expectation of privacy. However, an indoor place is still not public property. So the owner (even if it's a municipality) can legally make rules regarding what is allowed or not. And they have the legal right to prohibit photography. As to why they would prohibit it? See above about the UK. Too many people trying to make a quick $$ and legal systems that don't punish them for trying.
I think a lot of the regulation of photography is more centered around risk mitigation (i.e. avoiding lawsuits) than it is out of fear children can or would actually be harmed.
Quite honestly I don't blame schools or whoever. Stop the frivolous lawsuits and punish people for bringing them and I think you'll find less institutions do this sort of thing.