Based on what I've heard so far, I feel the Principal should be fired. He seems to have shown little concern in her first discussion with them, and his response only seems like an effort to calm her down for his sake.
He knows what happened is wrong, not because it's wrong, but because he has to deal with it now. His actions are only a reaction to the parents, and not a stand on behalf of the kids. No person like that should have the position of responsibility for children that he does.