Why not just switch the model from gathering students data to creating the apps anyways and just letting the school take care of sorting out which app works best for who.
Seems to me like there could have been a bunch of better ways to handle this other than shut it down
...which is pretty much why the players in this space who are finding success are companies like Clever (clever.com), who let schools keep their existing SIS/student management software, but offer conduits to get the data out into other applications.
I know the Clever co-founders post here fairly often, they'll probably chip in on their perspective at some point.