Re: A bit much...
> 1. Contact the infringing party direct and...
That may well have happened.
If not, the school should have gone all "mea culpa" after the first contact from the photographer (or his lawyer). Letting this go to court, especially with the only argument "things from the internet are public domain" is incredibly stupid.
Another thing: When you put something online it gets nicked all the time. People trying to make a living, say as a photographer, sometimes get enormously annoyed by that. So the photographer may have wanted to actually get things to court.
I am pretty certain it's not about the money. Ask anyone whether it's worth the time for a few hundred bucks.