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I think the major reason that most schools don't "do away" with this kind of thing is because they know that at least if they sanction it they can impose some sorts of limits. Like what happened at GBN, once the school outlaws the "tradition" they have no control over it and it usually just continues in other, generally worse forms outside of school.
My school had a "freshman trash day" that had, in the past, consisted of some really bad stuff. By the time I got there it was pretty much harmless (freshman getting markered up and/or taped to things, as opposed to in the past when getting beat up or put in trash cans and rolled down the stairs was apparently common). The administration had tried to put a stop to the whole thing and in theory, anybody getting caught doing the trashing was supposed to be suspended. But they knew if they did any hardcore cracking down on it, it would just end up moving outside of school and probably getting worse.
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