In what world is banning someone from college the right approach to handle someone with obvious mental issues disclosing his problems in a counseling center?
If his situation was "more extreme", the first course of action should be to escalate the situation to more qualified, not the college administration (who are neither qualified nor relevant). You can still kick someone out after they're in professional treatment.
It's extreme irresponsible to not just refuse treatment but actually measurably make their situation worse. You might as well hand them a razor and tell them "yes, you're right, take this and go kill yourself" while you're at it.
Any potential threat of negative repercussions only serves to destroy trust between a potential client and any therapist.
Imagine what would happen if people with AIDs had their info put into a public database (especially back when fear of the disease was much higher)? It would have destroyed not only the trust of those with or who might have AIDs, but of many people with other health concerns as well.
Likely there was something extremely dramatic about this case that made the college believe he was a clear threat to himself and/or others if he stayed at the college.