There were plenty of mistakes made on both sides here.
Was it smart to bring an item looking like this to school? No.
However, school officials and the police didn't treat it like an explosive device. There was no evacuation of the school, suggesting that it was clear the device was safe.
The U.S Citizen juvenile was then arrested, held, and questioned without being given the opportunity to contact an attorney or his parents being notified. He was apparently uncooperative with police, which likely escalated things as well.
So, plenty of f-ups all around. Let's shake hands and move on. Unfortunately, if the statements about his detention are true, the police department likey created liability for themselves. Dealing with juveniles is tricky business, and questioning them after arrest without an attorney present is a great way to get yourself in hot water.