Wouldn't surprise me. Most Unis don't really have much of a clue how the real world is. However the commenters on the story are wrong in one important regard - the fine UCL have dropped on the site builder isn't to do with the site being run on their servers or not and it does have legal jurisdiction (basically when you start at Uni you sign a contract which means things like this are allowed - they can impose a 'fine' and withhold his degree until he pays up). I'm sure he won't have any problem getting the money to pay it though, I'd imagine any number of people would be willing to throw piles of cash at 'the next facebook'.
Jon
