It is an optional service, the students either take it or leave it. Obviously the news article is making a mountain out of a mole hill. I suppose some students might expect photographers to PS out all imperfection and not to charge extra for it, others are against being told that they could look better by being digitally manipulated as an affront to their self esteem.
Seems like a long time coming to me - its so easy to quickly edit or put filters on images now, even if you're doing it on your phone, that I'm not at all surprised people want edited graduation photos. After all, they are likely to go on Facebook/Instagram etc