1) It's a great example of how good Jack Black is when you let him loose, but not completely loose.
2) There's no way they would have let Jack's character off the hook at the end of the movie.
I mean, come on, parents today freak out if their son has more than one spaghetti meal in the same day (at least Mister Van Houten does), are they really going to be okay with a fake teacher taking over their kids' home room class and giving them lessons in music and deception for a semester? No. In real life, the fake Mister Schneebly would have ended up teaching rock music to fellow convicts in the state penitentiary.
That's the real shame of it, because that would have made a great sequel — School of Jailhouse Rock.
There's even a pre-made theme song for Jack to get all Tenacious D on. Alas, why can't I work in Hollywood?