I'm not even active or necessarily a "believer" any more, and this still came off and pretty offensive and intolerant of people who practice religion as a whole, let along "Mormonism". Most everything you quoted (beards aside) is "sin" in some way or another by about 95% of Christian sects, so I really don't know what the surprise is. Everyone knows what they're getting into there, you have to sign your name to the honor code once a year and have to have a local church representative review it with you and co-sign it each year, whether you're LDS or not. It's a private school run by one of the most strict practicing religions around, it is what it is. You want to go to their school, you play by their rules. The school loses athletes each and every year, I have no idea why this time is getting any more news than the hundreds and hundreds of other times it's happened with better athletes.
Don't get me wrong, I went there, and thought the Honor Code was mostly idiotic and annoying. I could tell you tons of ridiculous stories about it. In this case though, anyone at BYU would know that they'd screwed up and would get kicked out.