I had to seriously pick my jaw up off the floor. I mean, imagine--dragon hat, football helmet, captain's hat, glittery baseball cap...warbonnet?! I felt completely disrespected and embarrassed.
To these graduating students' credit, I will point out that out of 1,300 graduates, there were only two headdresses that we saw. Considering how "trendy" the headdress look is right now, and the fact that they were told to wear "crazy hats," I'm actually surprised there weren't more. But I would still argue that two is too many.
This is also the perfect illustration of how Natives are placed in a "fantasy" category, along with wizards, magical creatures, and other forms of "dress up" costumes. Indians aren't "real." They are imaginary people, perfect for playing pretend--they can't possibly be contemporary people sitting a few rows behind you at a graduation ceremony.
For more on the subject, see The "Honor" of a Plains Chief and Why Hipster Headdresses Aren't Okay.