I see this all the time. We now have to use safety glasses for a variety of sports and the kids hate it. I have to explain some kids eye was damaged playing badminton, parents sued and won, and now viola. The problem is when the glasses end up being broken and we don't have enough. No badminton or floor hockey happens.I can say the reason rules, no matter how extreme they may seem, are instituted is because some student did something that had consequences and a new rule was formed. It's unfortunate that a small minority causes policies that impact the majority. It's just the way it is, particularly in a very litigious society.
As for banning hugs etc.. I primarily teach kindergarten and most kinders do not understand why they cannot touch someone at all. I am not a touchy feely person at all yet even I know that some of them need contact during the day. The problem is that not all parents feel the same way. I had a male friend that taught kindergarten one year. He had two parents warn him at the beginning of the year that they would be asking their children everyday what Mr * did at school. So often sometimes sadly these rules are meant to protect the teachers. Not saying its right but as mentioned above the consequences sometimes are horrible. I've heard stories from other teachers that makes me really hesitant to do a lot of things.
As for dodgeball as a supply I hated when that was down for gym. It always involved me breaking up a fight or sending a kid down for ice. Finally I just started stopping the game when it got that way. Did'nt make me popular but less incident reports to fill in.
And I cannot believe someone used volleyballs?