Why they lost.

FAIR lost FAIR v. Rumsfeld 8 votes to none. My theory is that its case was ludicrous, but the court couldn't take seriously this line in Yale's amicus brief, cited by James Taranto:

The [Yale] Faculty Members deeply respect those who serve in our nation's armed forces.

How do they expect the court to take them seriously when they put hogwash like that in their brief--especially when they have no qualms about admitting Sayed Rahmatullah Hashemi, former deputy foreign secretary of the Taliban into the Yale student body.