I heard an NPR report recently about that -- before they issued their fatwah though --
Some schools, maybe in the Dakotas, actually asked the Indian tribes concerned if they minded the use of the name for the school teams. They were told -- officially, by the tribes, that it was OK.
Think of the moneymaking possibilities for an official marketing connection between tribes and the school in question.
I wish wish wish the mascot the student body voted for at Stanford had been allowed by the school -- when they held elections to decide which way to go after they couldn't use an Indian theme, they wanted the "Stanford Robber Barons". I'd have followed that team! I like that. But it was a no-go.