I think with facebook and everything else in the internet, it only makes sense to have a consent form for class pictures.
I do think it is U.S./ U.K. politicaly correct thing (in Japan we dont have it), but I understand what could happen, and that the school need to evolve its policies with technology.
As for the smiley face, it is very tacky.
Tacky and distasteful. But I am sure it should ave been a bigger problem if it were a yellow smiley or cartoon face of a white kid.
Why cant they just say, "they did a shitty job on this picture. the camera man sucks".
& the teacher should have used their common sense and made the non consented kids sit on the edges of the back rows to make photo shopping easier. They clearly lack foresight and risk management. :P