The headline might be a little premature. ModDB may have taken the mod down on their site, but that doesn't necessarily preclude it being made available somewhere else.
I'm of mixed minds. If we genuinely believe that a game can't actually make someone commit violence, that remains true even if said game is deliberately inflammatory. And I certainly don't like real-world trolls like Thompson to feel, even for a moment, that their tactics might be successful. And, yes, I think someone has a right to express themselves, even in a something like the School Shooter Mod.
On the other hand, I don't feel that ModDB is required in any sense to offer such a thing. And the fact that they were receiving threats is truly regrettable. The industry doesn't need this kind of publicity, and it will inevitably come from the kind of people who don't have the foggiest idea what words like "mod" mean. The fact that the developer himself seems like a repugnant publicity-seeking troll doesn't fill me with sunshine and rainbows, either.
I don't like the mod, not because it's violent but because it set out to be truly offensive without even having anything meaningful to say, something that even a questionable game like "Super Columbine RPG" can claim, however tenuously. A lot of real people were devastated by the shootings and continue to recover from the wounds the tragedies inflicted on their lives. A decent person could be appealed to to consider that his work might harm people, but it sounds like this game's creator is in possession of no such decency.
In the end, I fall back on the line from Trainspotting: "It's a shite state of affairs! And all the fresh air in the world won't make a bloody bit of difference!"