He's on his own time. The show is not an illegal activity. The school and the show have no legal relationship with each other. How can the school claim the right to control this legal activity of his?
If he was a smoker, and he posed for prominent local billboard ads for a cigarette company, could the school fire him for the "bad image" his students could readily see him in?
Are they actually afraid some student, having seen him in the play will be sitting in class undressing him in her daydreams?
If they have the right to fire this teacher, do they have a comparable right to suspend a student who goes to see the play?
How is the private (not on school time) rights and freedoms of either students or the teacher brought under the control of the school in this way?
Morals dont stop at the school house door. Teachers should be role models, like others in authority positions. We certainly dont always live up to that, but at least we should try. Excusing this type of behavior because it really doesnt mean anything just lowers the bar once again.