As a music therapist, this story always hits me very hard. The psychic damage done to the person in terms of their relationship to music making has usually become a permanent condition. I'm not sure the many fine performances music educators may achieve by brutal triage are worth all the wounded they leave behind.
One of the issues facing the "classical" music world is that their audiences are grey and thinning. If they want the public to fund and attend all their high art, maybe they should work with music educators to have more than either/or options when it comes to musical participation. And if there aren't enough slots for interested students, maybe encourage the educators to at least have good manners when delivering the bad news. Whenever I hear this story, it's the ugliness of the dismissal that's most vividly remembered.