Here's my opinion. Children are entitled to a free, public education. That education is funded by pubic tax dollars, and those monies are also used to fund extra curricular activities, such as basketball. Since education is mandated to be "fair" (i.e. states can't hold special education students to the same criteria they hold non-special ed students to), then that fairness should be extended to any other element of education funded by tax dollars (sports, etc). In a public school, your rights are abbreviated to included everything up until you are disrupting the educational process (for example, in public you can flip an authoritative figure off and it is freedom of speech, however doing so during the school day disrupts the educational process, thus depriving other children their right to an education). A hair cut does not disrupt the educational process (assuming its not offensive), therefore a school district or district employee (the basketball coach) should not be able to regulate a team member's hairstyle.
I'm not saying he's right for out right breaking a rule set my the team, but it should be able to be challenged without the threat of him being kicked off the team.
Now time for everyone to disagree with me.