When I was in elementary school I kept getting stomach aches and other random ailments. I didn't know it, but they were caused by STRESS. I was in first grade. My mother noticed, and switched me to another school. Suddenly I loved school, my reading and math skills went up... It was the school, and the people that made me stressed.
If I ever have kids I would try to arrange my life to home school them. Everyone I know that has been home schooled are the most well adjusted ones. The one's in a certain private school are all in counseling. It just seems like a big chance to take.
Anyway, I can't say how angry I'd be at the school, since I have no kids. It seems as though the least they could have done is call you, first. And there is a difference between saying "don't touch my child" and saying "don't randomly wash my child's hair for no reason other than you don't like it." Which is what I feel happened in this case.
Edited to clarify, I don't think ALL schools are bad. It's just that you can't tell until the kids are already in it, if they're okay or not.