What the college did was unnecessary and definitely tarnishes its image.
But if I remember the older thread (on this topic) from DP, the Modesto Junior College is a private college. A private college has every right to determine how to conduct the affairs inside its premises. The law suit would be summarily dismissed since no harm was caused to the students by the college's private policy. Should churches allow free-speech and accept if people proselytize another religion in its premises.
If it were a public institution, then it would be an entirely different matter.