Certainly in this case the girl wasn't a direct threat to anyone else, the only threat I see here from the University's perspective is to their image as an institution that admits "cutters".
You're taking a very specific, dangerous situation (an active psychiatric illness) and making a large extrapolation to "any deviation from the norm".
People will active psychiatric illnesses are supposed to go to psych wards for immediate medication, and then are supposed to have months of follow up while they heal, adjust to meds, and learn to cope.
This official had an extremely bad choice of words, but what everyone is missing is that the right thing happened. She's healing. She's back. She's not dead.
Yes, she harbors a lot of resentment about what happened, but a lot of times people in these situations don't realize what really is for their own good. Unfortunately. Hopefully she can come to realize this eventually.
> wasn't a direct threat to anyone else
Have you read the other comments in this thread about suicidal (only self-harm) people, once in the hospital, slashing staff with a razor blade?
I assert people with psychiatric illnesses are not as predictable as you seem to think. Especially when they're going to be going through a med change, which is often a crap shoot about which meds help and which can actually make it worse.
Do you have training/experience to the contrary? I am admittedly not an expert on "cutters". Maybe we need a "IANAP" (I Am Not A Psychiatrist) disclaimer.
Also, the one comment you're referring to referenced an OD patient being physically restrained by medical staff -- are you going to tell me this is sufficient anecdotal evidence to make her a threat to other students?
[1] http://www.nursingtimes.net/survey-finds-worrying-number-of-...