Honestly, how much long term damage will dumping the fuel over the school really cause? What altitude was the jet at?
You are supposed to be at 5000' or higher to dump fuel, however, as heavy as he was, to climb to 5000' would have required 100% throttle on his remaining engine which would have put severe torque on the wing and that would have compromised control of the aircraft.
So to keep from killing a plane full of people, the Captain decided to dump fuel.
The people below should wash their face, use some visine, and be glad nobody was killed.