Highly doubt that people there thought that word was okay. I'm speaking from firsthand experience of spending time in that area...that theory just doesn't hold water.
Sheer incompetence is definitely a plausible theory...along with bad communication, poor leadership, and people afraid of confrontation even though they're working security.
If they had a hard time figuring out which person was yelling it, they should have had a security guard stand there right in front of them. Unfortunately a lot of times it's inexperienced students who are running the security at these events, which is clearly a bad idea...hopefully it's a wake up call for the university to spend the money to get some experience security staff to at least be in charge